Court Opinion

ID: 9469133
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:32:57.181064+00
Date Added: 2024-06-11T17:41:14.488133
License: Public Domain

MacKINNON, Circuit Judge
(dissenting).
Appellant Taxation with Representation of Washington (Taxation) is incorporated as a nonprofit charitable and educational organization whose purpose is to represent the general public on tax issues before Congress, the courts, and the executive branch. After its incorporation in June 1977, Taxation applied to the Internal Revenue Service (IRS) for a declaration that it was an organization described in § 501(c)(3) of the Internal Revenue Code (Code), 26 U.S.C. § 501(e)(3). Although Taxation may otherwise have qualified for section 501(c)(3) status,1 the IRS determined that Taxation intended to devote a substantial part of its activities to “attemptfs] to influence legislation” by lobbying Congress on matters involving the federal tax system. The effect of that determination, the correctness of which Taxation does not contest, was to deprive it of several tax advantages, including exemption from certain taxes on its own activities 2 and the eligibility to receive tax deductible contributions.3 (These advantages are referred to collectively herein as the “tax benefits” accruing to organiza*746tions qualifying under section 501(c)(3).) Taxation may still qualify for tax exemption on its own income as a social welfare organization under I.R.C. section 501(c)(4).4 That subsection, however, while placing no restrictions on an organization’s lobbying activities, does not result in donors being permitted to deduct contributions from their own income, gift and estate taxes.5
After exhausting its administrative remedies, Taxation brought a declaratory judgment action against the Commissioner of Internal Revenue under 26 U.S.C. § 7428 (1976),6 seeking a declaration that section 501(c)(3)’s restriction of substantial attempts to influence legislation is unconstitutional. The district court granted the Commissioner’s motion for summary judgment, Taxation with Representation of Washington v. Blumenthal, 43 A.F.T.R.2d (P-H) H 79-419 (1979), and on appeal, a divided panel of this court affirmed. Taxation with Representation v. Blumenthal, No. 79-1464 (D.C. Cir. April 14, 1981). On June 11, 1981, this court voted to hear the case en banc, which under our rules vacates the panel opinions. The court’s order stated that the hearing en banc would focus upon two issues: (1) the standard of review applicable to the challenged statutory scheme, and (2) the ultimate constitutionality of the Code’s distinction between fraternal and veterans’ organizations on the one hand and section 501(c)(3) exempt organizations on the other.7
I.
A case raising the same issue presented here was decided against one of Taxation’s predecessor organizations8 by the Fourth Circuit in Taxation with Representation v. United States, 585 F.2d 1219 (4th Cir. 1978), cert. denied, 441 U.S. 905, 99 S.Ct. 1994, 60 L.Ed.2d 374 (1979). The district court in this case followed that decision in disposing of Taxation’s contentions. 43 A.F.T.R.2d (P — H) 179-419 at 79-681. For the reasons set forth in the margin, I find the present *747suit not barred by the doctrine of res judicata, and therefore address the merits.9
Taxation challenges the Tax Code’s denial of tax benefits to otherwise qualified organizations which engage in substantial lobbying on what it views as two independent grounds. First, it asserts that section 501(c)(3), by conditioning tax benefits on the non-exercise of an organization’s rights of speech, press, and petition, violates the first amendment. This attack does not rely on any distinctions drawn by the Code among organizations, but rather proceeds from the premise that the lobbying restriction is invalid, regardless of the uniformity of its application, as a burden on protected speech. See Taxation Br. at 15. Second, Taxation argues that the Code, by placing restrictions on the lobbying activities of section 501(c)(3) organizations while placing no similar restrictions of those of veterans’ organizations defined in section 501(c)(19) or fraternal orders defined in sections 501(c)(8) and (10), denies it the equal protection of the laws guaranteed by the fifth amendment’s due process clause.10
*748II.
Taxation’s first claim is based on the contention that the statutory denial of tax benefits to organizations that engage in substantial lobbying places an “unconstitutional condition” upon the enjoyment of those benefits.11 The cornerstone of this argument is Speiser v. Randall, 357 U.S. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958), in which the opinion of Justice Harlan for the Court established the proposition that the enjoyment of a government-conferred benefit cannot be made contingent upon compliance with a condition that violates the first amendment rights of one who would otherwise qualify for the benefit.12 Taxation urges that the lobbying restriction in section 501(c)(3) imposes precisely such a condition. This contention, as the majority recognizes, is without merit.
Taxation does not claim that the challenged provisions “chill” its speech by imposing a direct restriction or penalty upon its lobbying activities. Nor, moreover, does it claim that the effectiveness of its presumed “charitable and educational” activities — in fact, lobbying of Congress — is diminished by the bare fact, without more, of its non-exempt status. Taxation’s claim is confined to the assertion that because it does not qualify as an exempt organization under section 501(c)(3), it is rendered significantly less able to raise funds in support of its activity.13 Even if government has no obligation to support its activities either directly or through the tax structure, Taxation argues, the decision to provide or withhold such support cannot permissibly turn upon whether or not it exercises its first amendment right to lobby.
The condition placed upon Taxation plainly has its direct effect not upon speech, but upon fundraising. This fact does not, however, render the protections of the first amendment inapplicable, for it is well established that “the Constitution’s protection is not limited to direct interference with fundamental rights.” Healy v. James, 408 U.S. 169, 183, 92 S.Ct. 2338, 2347, 33 L.Ed.2d 266 (1972). “Even where a challenged regulation restricts freedom of expression only incidentally,” the first amendment demands heightened judicial sensitivity. Schad v. Borough of Mount Ephraim, 452 U.S. 61, 68 n.7, 101 S.Ct. 2176, 2183 n.7, 68 L.Ed.2d 671 (1981). See also Buckley v. Valeo, 424 U.S. 1, 21, 96 S.Ct. 612, 635, 46 L.Ed.2d 659 (1976); Bates v. City of Little Rock, 361 U.S. 516, 523, 80 S.Ct. 412, 416, 4 L.Ed.2d 480 (1960). The question whether the condition placed upon exempt status by section 501(e)(3) violates any right guaranteed Taxation by the first amendment therefore deserves thorough examination.
I agree that lobbying is an activity generally protected by the first amendment. I also agree for the purposes of this case that Taxation possesses in general the same rights of speech and petition guaranteed other persons. See First National Bank v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978). But in my view, under the specific circumstances of this case, Congress could constitutionally condition the availability of tax benefits upon an agree*749ment not to engage in substantial lobbying. In this instance, the reach of Taxation’s right to lobby can be determined only in the context in which that right is asserted.14 By holding itself out as a charitable or educational organization and laying claim to the tax benefits accorded such organizations, Taxation has assumed a status which Congress may constitutionally regard as incompatible to some extent with the carrying on of substantial political activities, and which may therefore be made subject to conditions upon its enjoyment that would otherwise be impermissible.
In first amendment cases, the threshold question of the level of scrutiny applicable to the challenged provision turns upon whether the alleged restriction is one based upon the “content” of the communication sought to be protected. Where speech is restricted because of its content rather than because of its incidental effects on governmental interests the Constitution demands strict judicial scrutiny. Satisfaction of that standard requires the government to demonstrate “that its regulation is necessary to serve a compelling interest and that it is narrowly drawn to achieve that end.” Widmar v. Vincent, -U.S. -, -, 102 S.Ct. 269, 274, 70 L.Ed.2d 440 (1981). In contrast, where a restriction, though trenching on speech, is directed not at the content of the speech, but at the “non-speech” elements of the restricted activity, government bears the considerably lighter burden of showing that the restriction furthers an “important or substantial governmental interest” and is “no greater than is essential to the furtherance of that interest.” United States v. O’Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 1679, 20 L.Ed.2d 672 (1968). See Consolidated Edison Co. v. Public Service Commission, 447 U.S. 530, 540 n.9, 100 S.Ct. 2326, 2335 n.9, 65 L.Ed.2d 319 (1980).
'For the reasons set forth below, I view the lobbying restriction in section 501(c)(3) as one unrelated to the content of protected speech. I have no difficulty in finding that the governmental interest expressed by the restriction is a substantial one, and that the means Congress has chosen to protect that interest are sufficiently narrow to satisfy the Constitution. Consequently, in my opinion Taxation’s argument that the lobbying restriction in section 501(c)(3) is an “unconstitutional condition” upon the enjoyment of the tax benefits Taxation seeks to finance its substantial lobbying should be rejected.
A.
Taxation argues that the lobbying restriction is one “based on the type of speech or the subject matter” of protected expression, and therefore merits strict scrutiny. Taxation Br. at 15. However, the argument plainly fails when one compares section 501(c)(3) with the types of statutes invalidated by the Supreme Court as “content-based” restrictions on speech. Section 501(c)(3) is not a restriction based on content. It is not aimed at the “message” or “communicative impact” of Taxation’s activities, but rather at confining tax-supported organizations to those activities Congress deems worthy of encouraging by public support through the tax system. The restriction is directed neither toward controlling what Taxation’s audience may hear, nor toward controlling Taxation’s message because of its viewpoint or subject matter. It simply regulates the activities of an entity which happens to be, inter alia, a speaker, and is imposed for reasons wholly unrelated to the message Taxation seeks to convey.15 The fact that the statute in terms specifically restricts activities a “substantial *750part” of which is “carrying on propaganda, or otherwise attempting to influence legislation” cannot support the inference that the provision is one aimed at any particular subjects or viewpoints.
The Supreme Court’s decisions invalidating content-based restrictions on speech demonstrate that strict first amendment scrutiny is reserved for those instances in which the government has sought specifically to “dictat[e] the subjects about which persons may speak and the speakers who may address a public issue.” First National Bank v. Bellotti, 435 U.S. 765, 785, 98 S.Ct. 1407, 1420, 55 L.Ed.2d 707 (1978). The application of this high standard is appropriate “[ejspecially where . . . the legislature’s suppression of free speech suggests an attempt to give one side of a debatable public question an advantage in expressing its views. ...” Id. Even where the motive of Congress in enacting a restriction bearing on speech has been claimed to be non-neutral with respect to content, see United States v. O’Brien, supra, the Court has refused to apply strict scrutiny. It has confined application of that test to cases in which the government’s asserted interest is directly related to the content of the restricted communication. See, e.g., Widmar v. Vincent, supra, -U.S.-, 102 S.Ct. 269, 70 L.Ed.2d 440 (1981) (invalidating, on free speech grounds, state university rules that generally permitted use of campus facilities but denied use for religious purposes); Metromedia, Inc. v. San Diego, 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981) (invalidating ordinance that permitted commercial expression while prohibiting noncommercial expression in identical circumstances); Central Hudson Gas & Electric Co. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980) (invalidating regulation that prohibited utility from promoting use of electricity); Consolidated Edison Corporation v. Public Service Commission, 447 U.S. 530, 100 S.Ct. 2326, 65 L.Ed.2d 319 (1980) (invalidating regulation that prohibited utility from expressing views on “controversial issues of public policy”); Carey v. Brown, 447 U.S. 455, 100 S.Ct. 2286, 65 L.Ed.2d 263 (1980) (invalidating ordinance that permitted labor picketing while prohibiting other picketing); Police Department v. Mosley, 408 U.S. 92, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972) (same).16
Where neither discrimination among viewpoints nor among subjects of discussion is involved, the concerns prompting strict scrutiny are absent. The lobbying restriction imposed in section 501(c)(3) does not “dictat[e] the subjects about which persons may speak and who may address a [given ] public issue,” and certainly does not “suggest[] an attempt to give one side of a debatable public question an advantage in expressing its views ...” First National Bank v. Bellotti, supra, 435 U.S. at 785, 98 S.Ct. at 1420 (emphasis added). The statute merely reflects Congress’ determination that groups claiming exemption from the normal obligations imposed by the tax laws must devote the resources thereby gained to the purposes for which Congress granted the exemption in the first place.17
*751The restriction imposed by § 501(c)(3) is not rendered invalid merely because it requires organizations enjoying exempt status to confine themselves to largely non-political activities. The ordinance invalidated in Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 100 S.Ct. 826, 63 L.Ed.2d 73 (1980), somewhat similarly restricted the activities of charitable groups by requiring that they spend at least 75 percent of their receipts directly for “charitable purposes.” A principal difference between that restriction and the one involved here is that the Schaumburg ordinance burdened an activity (solicitation of funds door-to-door) “characteristically intertwined” with speech. A second significant difference, however, is that the restriction in Schaumburg was defended primarily as one that sought to prevent fraud upon donors.18 Section 501(c)(3) has an entirely different purpose. Here, the government has conferred tax benefits on the organization seeking taxpayer support in order to encourage particular kinds of activity in the public interest, and has imposed the lobbying restriction as a means to insure that that benefit is issued directly to further the purposes Congress sought to encourage in granting the benefit.19
B.
The foregoing establishes that this case does not concern a content-based restriction on speech. It remains to decide whether the lobbying restriction satisfies the lower standard of first amendment review imposed by United States v. O’Brien, supra, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968).20 That standard is, as stated above, whether the law in question serves an “important or substantial governmental interest” whose “incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.” Id. at 377, 88 S.Ct. at 1679. It is my conclusion that section 501(c)(3) satisfies both concerns.
1. Governmental Interest
Taxation argues that there is no clear statement in the legislative history of section 501(c)(3) of the purpose Congress sought to achieve in imposing the lobbying restriction as a condition on the enjoyment of tax benefits, and claims that the statute is therefore supported only by “post hoc and speculative arguments of Government counsel, which are constitutionally insufficient.” Taxation Br. at 16. I disagree. The interests Congress sought to further are clear, and clearly suffice to justify the statute.
Where legislative intent is manifest in the words or obvious effect of a statute itself, the absence of comment thereon in the hearings, reports, or floor debates of Congress is not to be taken as evidence that the statute is devoid of rational purpose. See Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 241, 90 S.Ct. 1583, 1587, 26 L.Ed.2d 199 (1970). So-called “post hoc” arguments are permissible to interpret and support congressional enactments. Congress is not an administrative agency that is required to state the grounds upon which it acts, and courts do not interfere with the powers of Congress when exercising their judicial power to interpret federal statutes. Cf. Securities and Exchange Commission v. Chenery Corporation, 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947); id., 318 U.S. 80, 95, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943). It is not *752necessary in its legislative record for Congress to explain every provision of every statute and foresee every argument that may be asserted in support of or against its enactments. This is as true in the first amendment context as it is elsewhere. See, e.g., Buckley v. Valeo, 424 U.S. 1, 106, 96 S.Ct. 612, 676, 46 L.Ed.2d 659 (1976). Although the fact is often forgotten, statutes can often be interpreted by reference to their plain terms without reference to extraneous sources. This is such a statute. Read in the context of the plain purpose of section 501 — to benefit certain groups performing various services that Congress views as being in the public interest21 —subsection (c)(3) clearly indicates a congressional intent to encourage certain activities viewed as charitable and educational.
The lobbying restriction, since it cannot successfully be attacked on the ground that it discriminates among organizations based upon the content of their speech, can only sensibly be read as an attempt to confine such groups to purposes that are directly charitable or philanthropic. As Judge Wilkey has stated, the lobbying restriction in section 501(c)(3) “is aimed at assuring some purity in that purpose.”22 Similarly, a committee report interpreting the provision shortly after its original enactment stated:
The exemption ... is based upon the theory that the Government is compensated for the loss of revenue by its relief from financial burden which would otherwise have to be met by appropriations from other public funds . . .
H.R.Rep.No.1860, 75th Cong., 3d Sess. 19 (1938). Congress could reasonably conclude that limiting the lobbying activities of educational and charitable organizations was a proper means of ensuring that the benefits these organizations produce will be received by the intended beneficiaries.
Although it is unnecessary, in the absence of evidence indicating a contrary intention, to seek further justification in the legislative history for the lobbying restriction, it merits noting that contrary to Taxation’s claims, there is a strong indication of Congress’ intent in imposing that regulation. The floor debate on amendments to the Revenue Act of 1934, in which section 501(c)(3) (section 23(o) of the 1934 Act) has its origin, contains discussion the significance of which cannot be obscured by its brevity.
In a colloquy between Senator Reed of Pennsylvania and Senator Harrison, the concern was raised that the language restricting propaganda and attempts to influence legislation — the precise language found in the statute today — would have the effect of denying exempt status to organizations such as “the Society for the Prevention of Cruelty to Children, or the Society for the Prevention of Cruelty to Animals, or any of the worthy institutions that we do not in the slightest mean to effect.” 78 Cong. Rec. 5861 (1934) (remark of Sen. Reed). Although he specifically noted and endorsed this desire on the part of Congress to protect the activities of such philanthropic groups, Senator Reed voiced the position of the Senate Finance Committee that “[tjhere is no reason in the world why a contribution . . . should be deductible as if it were a charitable contribution if it is a selfish one made to advance the personal interests of the giver of the money. That is what the committee was trying to reach ...” Id. (emphasis added)23 Despite the fact that Senator Reed personally favored a *753narrower restriction, Congress, having before it the above interpretation by a leading member of the committee charged with responsibility for tax matters, adopted the language presently found in section 501(c)(3). Even if the statutory language were thought to leave substantial doubt about the purpose sought to be achieved by the lobbying restriction, this revealing history resolves any question about the intent of Congress in adopting it.
Thus interpreted, it is beyond question that the lobbying restriction serves an “important and substantial” interest of the United States. The encouragement of charity, education, and similar objectives through the tax system, like that achieved by direct congressional appropriations for such purposes, is an interest whose legitimacy cannot seriously be doubted. The interests served by the activities of the organizations enumerated in section 501(e)(3) are well within both the power of Congress to serve the public interest and the traditional scope of the exercise of that power.
2. The Scope of the Restriction
Taxation’s final argument against section 501(c)(3) is that, even conceding the government to have an important and substantial interest that is served by the restriction, the restriction is invalid because it is broader “than is essential to the furtherance of that interest.” United States v. O’Brien, supra, 391 U.S. at 377, 88 S.Ct. at 1679. Even where a restriction on speech is not directed at content, the first amendment imposes the requirement that government adopt the means of achieving its purpose that is least restrictive of first amendment interests. Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 636, 100 S.Ct. 826, 835, 63 L.Ed.2d 73 (1980).
Taxation’s argument is based upon the fact that all tax benefits emanating from section 501(e)(3) are denied to any organization a “substantial part of the activities of which” is lobbying. This, Taxation alleges, renders the restriction broader than necessary to achieve Congress’ purpose, in that if Congress sought only to deny tax benefits to organizations engaged in “selfish” activity, and so to deny deductibility to their contributors, the achievement of that end requires only that that portion of contributions actually used for the prohibited “selfish” purposes be treated as nonexempt and non-deductible. The remainder of the funds, used for purposes not expressly forbidden, would continue to qualify for exemption and deductibility.
The accuracy with which government defines categories of citizens for the purposes of regulation is a matter of particular importance when first amendment interests are at stake. Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). Courts in such circumstances are not relieved, however, of their duty to respect the superior competence and concomitant authority of the legislature in devising means of regulation. As was held in Buckley v. Valeo, 424 U.S. 1, 30, 96 S.Ct. 612, 640, 46 L.Ed.2d 659 (1976), “Congress’ failure to engage in such fine tuning does not invalidate” legislation, even where the legislation in question burdens first amendment freedoms of speech and association. See also id. at 83, 103, 96 S.Ct. at 665, 675.24 It has long been recognized that this deference to legislative competence is particularly appropriate where the regulation involved is a system of taxation. San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 41, 93 S.Ct. 1278, 1301, 36 L.Ed.2d 16 (1973); Madden v. Kentucky, 309 U.S. 83, 88, 60 S.Ct. 406, 408, 84 L.Ed. 590 (1940).
*754I reach the same conclusion as the majority and view the Code as a whole as a scheme of regulation that is sufficiently narrow to satisfy first amendment concerns. In my opinion, the recent enactment of section 501(h) of the Code provides an insight into Congress’ choice of means in regulating charities that compels the conclusion that section 501(c)(3) is valid.25
Before proceeding to a discussion of the terms of section 501(h) and their relationship to section 501(c)(3), it is important to note the significance of that relationship. Section 501(h) is the product of an extensive effort by Congress to establish precise limits on the political activity of charitable organizations.26 In effect, section 501(h) constitutes the congressionally-engineered “less restrictive alternative’’ to the lobbying restriction in section 501(c)(3). Rarely are courts in our position presented with such a ready-made, legislatively-created solution to the sort of first amendment problem raised here. We should therefore recognize that this action by Congress is entitled the great weight.
In addition to this prudential aspect of the relationship between the two subsections, there is an important logical connection. On the one hand, if section 501(h) truly offers a less restrictive alternative than section 501(c)(3) to organizations like Taxation, Taxation’s remedy is to proceed under subsection (h) rather than under (c)(3).27 If, on the other hand, section 501(h) is an equally or more restrictive means of confining charities to their proper purposes, one should be extremely reluctant to hold that Congress can and must produce a still better resolution of the competing interest than it has in either 501(h) or 501(c)(3). Bearing in mind the effort Congress has made to resolve these interests precisely, and this court’s limited authority to second-guess that determination, I proceed to an examination of the purpose and effect of section 501(h).
Section 501(h) was enacted as part of the Tax Reform Act of. 1976, Pub.L.No.94-455 § 1307, 90 Stat. 1720 (1976). It permits organizations described in section 501(c)(3) to opt out of regulation under the “substantial part” standard of (cX3) and come under precise quantitative limitations on the amount they may spend on influencing legislators (“lobbying expenditures”) and the public (“grass roots expenditures”). I.R.C. § 501(h)(2)(A), (C). Generally speaking, any section 501(c)(3) organization that is not a church may so elect. I.R.C. § 501(h)(5). By electing to be treated under section 501(h), an organization is permitted, subject to certain disclosure requirements, to expend on lobbying and “grass roots” political activity up to 25% of the *755amount it spends on exempt purposes specified in section 501(c)(3).28 Expenditures in excess of this ceiling amount result in the imposition of a 25% tax on the excess. I.R.C. § 4911(a)(1).
The history of attempts to clarify and quantify the limits on the political activity of exempt organizations which culminated in the adoption of section 501(h) in 1976 is a fine example of congressional activity in response to first amendment concerns. The features of section 501(h) and its related provision, section 4911, combine to satisfy any valid objection that Taxation may have to the lobbying restriction. First, they represent a clear statement of Congress’ understanding of the relationship between charitable purposes and political activity. Any ambiguity of purpose claimed to underlie the section 501(c)(3) lobbying restriction, see Taxation Br. at 16; majority op. at 736, is resolved by section 501(h)’s treatment of the subject.29 Second, Taxation’s objection that section 501(c)(3) denies all tax benefits to an organization that does some (i.e., a more than an insubstantial amount of) lobbying, is addressed by section 4911’s 25% tax on excess lobbying expenditures. I.R.C. § 4911(a). The loss of tax benefits is, under this system, directly proportional to the extent of the organization’s lobbying activity, eliminating the alleged “massive overkill” effect of section 501(c)(3). See Taxation Br. at 17. Finally, the legislative history and structure of section 501(h) illustrates the weakness of the claim, see Taxation Br. at 15, that Congress is seeking to regulate speech because of its communicative impact.30
It remains to be considered whether the availability of the section 501(h) alternative is relevant here. I believe that it is, notwithstanding the fact that Taxation has elected not to come under that section’s coverage.
As noted previously, the chief significance of section 501(h) for the purposes of this case lies in the fact that it represents a recent congressional enactment to meet the problems that Taxation now raises. The statute indicates (1) that Congress finds that legislative lobbying activity might be compatible with charitable purposes to a limited extent, and (2) that any charitable organization wishing to engage in legislative activity should, in the judgment of Congress, be subject to well-defined regulatory limits on their lobbying activities. Whether or not an organization chooses to elect coverage under section 501(h), these congressional determinations must be respected.
Although Taxation from all indications in the record would qualify for treatment under section 501(h), it testified before the District Court that it elected not to be so treated:
[Taxation] has not made and does not plan to make, an election under sections 501(h) and 4911 of the Code. Such an election might require us to accept restrictions which are not justified or authorized under the First Amendment of the Constitution, on our right to communicate with our contributors and members regarding matters of legislative interest. Sections 501(h) and 4911 also fail to define with any narrow specificity such terms as “legislative activities” and “tax*756able expenditures”. For this reason, an election under section 501(h) might require us to impose prior restraints on the publication of Articles in our weekly tax news-magazine, Tax Notes. An election under section 501(h) might also require us to accept limitations on our legislative activities which we believe are unconstitutional and which are not imposed on similarly situated tax exempt organizations, such as, for example, trade associations, fraternal societies, labor unions, veterans organizations, and in practice, churches. In addition, the income of an organization such as Taxation with Representation of Washington normally fluctuates widely from year to year. Therefore as a practical matter, a percentage test — such as that in section 501(h) — to determine the permissible level of spending on legislative activities is unworkable.
Field Aff. at 2-3 (J.A. at 15-16).
Except for the same complaints of discriminatory treatment that it raises in this case, Taxation’s alleged reasons for choosing to remain under section 501(c)(3) amount to conclusory objections to (1) the specificity of statutory terms in sections 501(h) and 4911, and (2) the “workability” of a quantitative expenditure limitation. These questions regarding section 501(h) are obviously not suited for resolution here.31 However, we do not believe that this precludes us from recognizing the existence of the statute or the congressional determinations that it represents. Although Taxation cannot be compelled to elect coverage under section 501(h), this does not mean that its present case must be evaluated as if that statutory alternative did not exist.
From the foregoing, it is submitted that Congress has legitimately drawn a distinction between charitable organizations that engage in substantial lobbying and those that do not. The restrictions to which an organization is subject depend upon the extent of its exercise of the right to lobby, but in any event, those restrictions serve a clearly valid public interest and are drawn with sufficient precision to comport with the requirements of the first amendment.
III.
Next to be considered is Taxation’s second claim that imposing the lobbying restriction on the activities of section 501(c)(3) organizations, while placing no similar restriction upon fraternal organizations exempted by sections 501(c)(8) and (10) or veterans’ groups exempted by section 501(c)(19), discriminates against Taxation in a constitutionally impermissible manner. This claim is similarly rejected.
Recent legislative attempts to deal with the complex relationship of money, politics, and constitutional guarantees have provided the Supreme Court with several opportunities to set forth the standards applicable here. Those standards support the conclusion that Congress has acted consistently with the requirements of the first amendment.
In evaluating any claim of unlawful discrimination, whether under the constitutional strictures of the first, fifth and fourteenth amendments or under some other provision of law, it must be remembered that “[sjometimes the grossest discrimination can lie in treating things that are different as though they were exactly alike ...” Buckley v. Valeo, 424 U.S. 1, 97-98, 96 S.Ct. 612, 672-673, 46 L.Ed.2d 659 (1976), quoting Jenness v. Fortson, 403 U.S. 431, 441-42, 91 S.Ct. 1970, 1975-76, 29 L.Ed.2d 554 (1971). It cannot simply be presumed that two parties, one of who complains of treatment different from that received by the other, are situated so similarly that the difference rises to the level of “discrimination.” Obviously, differential treatment of members of different classes of persons cannot be equated with differential treatment of persons identically situated. Con*757stitutional scrutiny of an alleged “discrimination,” in short, presupposes that the essential characteristics of the complaining party are in the main indistinguishable from the characteristics of those who are alleged to be treated more favorably. Equal protection does not require that “things which are different in fact ... be treated in law as though they were the same.” Tigner v. Texas, 310 U.S. 141, 147, 60 S.Ct. 879, 882, 84 L.Ed. 1124 (1940).
We take it as beyond dispute that were Congress to preserve the existing benefit provisions favoring veterans’ organizations while wholly eliminating those afforded other charitable organizations, Taxation would be without a colorable claim of discrimination under the first or fifth amendments.32 Generally speaking, Congress is free, subject to the minimal constraint of “rationality,”33 to determine that veterans’ groups are worthy of those benefits while other groups with charitable or educational purposes are not. The fact that veterans’ organizations would be permitted to engage in lobbying among their other activities34 would not be cause for Taxation to complain of congressional discrimination favoring veterans’ speech over its own. Government is free to choose the interests to which it offers support via the tax structure, even if as a result some groups are able to exercise their speech rights at a lower effective cost than are others.35
The foregoing would not establish the constitutionality of a measure that conditioned receipt of a benefit by one group over another on the basis of particular political views or interests, nor that of one which imposed a direct burden on protected speech. What it does establish, however, is that when Congress determines that two organizations serve significantly different purposes, or present significantly different regulatory problems, the Constitution does not require it to afford them identical treatment.
The fatal defect in the majority opinion is its failure to recognize the different regulatory considerations presented by veterans’ groups36 and 501(c)(3) organizations. The majority adopts the tacit assumption that, but for the lobbying restriction, Taxation is for all relevant purposes legally indistinguishable from veterans’ groups. The majority therefore draws the conclusion that the difference in treatment permitted by that restriction is discrimination touching on the fundamental right of free speech. I disagree strongly with the assumption that Taxation and veterans’ groups are identically situated with respect to the purposes of Congress in conferring these tax benefits, and consequently cannot accept the conclusion the majority draws from it.
The majority appears to view veterans’ organizations simply as 501(c)(3) organizations which happen for purely technical reasons to occupy a separate Code subsection, 501(c)(19). That view ignores both Congress’ own understanding of the Tax Code’s provisions and the unique character, status and function of veterans’ groups under the laws of the United States. Insofar as these reveal important differences between veterans’ groups and charitable or educational groups in general, nothing in the first or fifth amendments forecloses Congress from legislating on the basis of those differences *758as it has done here. Far from being essentially fungible charities, Taxation and veterans’ groups are fundamentally different in their purposes, their operations, and their responsibilities under the law. Those differences lead to the conclusion that Taxation has not been subjected to unconstitutional discrimination.
The fact that veterans’ groups are treated in a statutory provision (501(c)(19)) distinct from the general exemption for charitable and educational organizations in section 501(c)(3) itself tends to suggest that Congress viewed these groups as essentially different types of organizations. The majority attributes this separate treatment to purely technical reasons, namely, the need to insulate veterans’ organizations from the tax imposed on unrelated business income by the Tax Reform Act of 1969. Maj. op. at 734. See S.Rep.No.92-1082, 92d Cong., 2d Sess. (1972); H.R.Rep.No.92-851, 92d Cong., 2d Sess. (1972). That attempted explanation is not sufficient.
First, it appears that at the time it enacted section 501(c)(19), Congress viewed veterans’ organizations as falling outside the scope of section 501(c)(3). In stating their understanding of the existing law, the committee reports on section 501(c)(19) stated only that veterans’ groups qualified as “social clubs” under section 501(c)(7) or as “social welfare organizations” under section 501(c)(4).37 At the time Congress enacted 501(c)(19), then, it believed that veterans’ groups were not classified with Taxation as 501(c)(3) groups subject to the lobbying restriction.38 It viewed veterans’ organizations as falling into a class with groups entitled to enjoy tax-exempt status without any restriction on their political activities.
Second, the legislative evolution of the specific provisions for income, gift and estate tax deductions of contributions shows that Congress, having originally extended the benefits of exempt status and deductibility to all types of charitable and educational groups, subsequently determined to withdraw it only from section 501(c)(3) organizations that engaged in substantial attempts to influence legislation.39 The basis for that decision need not be set forth explicitly for it to be entitled to this court’s respect, but the previously quoted debate on that action shows that Congress was cognizant of the distinction it was drawing.
This evolution of the present section 501(c)(3) — first extending the benefits of exemption and deductibility, later paring them back — is precisely the sort of response to social experience and legislative experiment that the Supreme Court has held most worthy of judicial deference. Contrary to the majority opinion, the rule that “reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind”40 is fully applicable to this case notwithstanding the presence of first amendment concerns. That is the unmistakable meaning of the Supreme Court’s holding in Buckley v. Valeo, supra, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976).
*759In Buckley, the Court was presented with a challenge to various features of the Federal Election Campaign Act of 1971, 2 U.S.C. § 431 et seq. (1976). Among the issues there presented was the claim that the provision of the Act providing for federal funding of primary election campaigns, which allowed no funds to candidates for office who did not run in primary elections, unconstitutionally discriminated against those candidates in violation of the first and fifth amendments. The Court rejected this challenge, holding that the different treatment was justified in view of Congress’ power to structure the conduct of federal elections. The Court stated:
[I]n deciding the constitutional propriety of the limitations in such a reform measure we are guided by the familiar principles that a ‘statute is not invalid under the Constitution because it might have gone farther than it did,’ Roschen v. Ward, 279 U.S. 337, 339 [49 S.Ct. 336, 73 L.Ed. 722], that a legislature need not ‘strike at all evils at the same time,’ Semler v. Dental Examiners, 294 U.S. 608, 610 [55 S.Ct. 570-571, 79 L.Ed. 1086], and that ‘reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind,’ Williamson v. Lee Optical Co., 348 U.S. 483, 489 [75 S.Ct. 461, 465, 99 L.Ed. 563].
424 U.S. at 105, 96 S.Ct. at 675, quoting Katzenbach v. Morgan, 384 U.S. 641, 647, 86 S.Ct. 1717, 1721, 16 L.Ed.2d 828 (1966) (footnote omitted).41 In a footnote to this statement, the Court made explicit its holding that this understanding of Congress’ power was fully applicable in first amendment cases of precisely the character that is present here. See id. 424 U.S. at 105 n. 143, 96 S.Ct. at 675 n. 143.
The statute at issue in Buckley was an attempt by Congress to regulate the effects of massed private wealth upon federal elections. As such, it presented concerns lying at the very heart of the political freedom protected by the first amendment. The regulation imposed by section 501(c)(3) can hardly be said to pose an equally or still more serious threat to those values.
When the specific actions of Congress relative to the status of veterans’ groups, including its regulation of their political activities, are examined more closely than the majority is apparently willing to do, this conclusion is even more evident. Congress’ decision in 1934 to limit the lobbying restriction to 501(c)(3) organizations — to take “one step at a time” — is amply supported by the contemporary and continuing “fact of American life”42 regarding the unique status of veterans’ organizations in our society. In view of this familiar social fact, Congress was clearly justified in focusing its attention on what it perceived to be the most serious abuse of the tax-exempt organization statutes, namely, the activities of the generally-described organizations presently defined in section 501(cX3)43
War veterans have made unparalleled contributions to the creation and preserva*760tion of this nation. Their organizations have existed in this country from the beginning. These organizations have sought to aid disabled veterans, to assist their widows and orphans, and to provide for mutual support and assistance among those who served their country in time of war. See generally W. Glasson, Military Pension Legislation (1900). Some of these organizations play a vital continuing role in the administration of laws benefitting veterans, as Congress has specifically recognized and provided for. See, e.g., 38 U.S.C. § 3402(a) (1976) (permitting veterans’ organizations to represent veterans in presenting claims to Veterans’ Administration and the furnishing of office space to them). The close coordination between veterans’ organizations and the government is unique. Congress has continued to acknowledge the importance of veterans’ organizations by incorporating them with federal charters in order to permit them to carry out their philanthropic purposes. See, e.g., Pub.L. No.97-83, 95 Stat. 1094 (Nov. 20, 1981) (chartering United States Submarine Veterans of World War II).44 Because of the important and unique public role played by veterans’ groups, Congress could properly regard them as a different kind of entity deserving tax treatment different from that accorded the more generally described charitable organizations subject to section 501(c)(3).
It could do this, as Buckley demonstrates, even though a perceived effect of the different treatment might be the creation of an indirect burden on other groups’ first amendment interests. Buckley presented a regulatory provision which made the receipt of a financial benefit (campaign funding) contingent upon the past success of a candidate in primary elections.45 That case, much more so than this one, tested a statute which made political success — and therefore, the content and consequent popularity of one’s political ideas — a condition on the receipt of a benefit. The Court nevertheless upheld the provision as one enacted “in furtherance of sufficiently important governmental interests” with little practical impact on the rights of the parties disadvantaged thereby. 424 U.S. at 95-96, 96 S.Ct. at 971 — 72. Finding it evident that here, as there, “there are obvious differences in kind”46 between veterans’ organizations and section 501(c)(3) organizations, in my judgment the decision to restrict the lobbying activities of section 501(cX3) organizations by placing a condition upon their receipt of tax benefits, without placing an identical condition upon veterans’ organizations, was within the power of Congress.
Finally, it must be stressed that Congress has in fact acted to limit the lobbying and other political activities of the nation’s more prominent veterans’ groups, including the American Legion and AMVETS. The statutes governing these and other organizations of veterans chartered by Congress uniformly contain provisions barring them from engaging in partisan political activity and otherwise limiting the political involvements they may pursue. In incorporating the Disabled American Veterans, for example, Congress provided that it “shall be nonpolitical and nonsectarian, and as an organization shall not promote the candidacy of any person seeking public office.” 36 U.S.C. § 90f (1976) (emphasis added)47 In*761deed, most recently Congress has imposed charter restrictions, identical to the restrictions of section 501(c)(3), upon the United States Submarine Veterans of World War II and the Italian American War Veterans of the United States. Their charters were granted in 1981 by Congress subject to the restriction that they “shall not contribute to, support or otherwise participate in any political activity or in any manner attempt to influence legislation.” 48
To the extent that such direct limitations on the activities of veterans’ organizations exist it is not even necessary to consider the extent to which the different treatment accorded them and section 501(c)(3) organizations within the provisions of the Tax Code is justified by the government’s interest in veterans’ affairs. For to that extent, veterans’ groups operate under constraints essentially similar or even identical49 to those imposed by section 501(c)(3) upon groups like Taxation, and hence no true “discrimination” in their favor occurs.50 As the Supreme Court recently stated in California Medical Association v. Federal Election Commission, 453 U.S. 182, 101 S.Ct. 2712, 69 L.Ed.2d 567 (1981), in upholding section 320(a)(1)(C) of the Federal Election Campaign Act,
We have already concluded that § 441a(a)(l)(C) does not violate the First Amendment. In order to conclude that it nonetheless violates the equal protection component of the Fifth Amendment, we would have to find that because of this provision the Act burdens the First Amendment rights of persons subject to § 441a(a)(l)(C) to a greater extent than it burdens’ the same rights of corporations and unions, and that such differential treatment is not justified. We need not consider this second question — whether the discrimination alleged by appellants is justified — because we find no such discrimination. Appellants’ claim of unfair treatment ignores the plain fact that the statute as a whole imposes far fewer restrictions on individuals and unincorporated associations than it does on corporations and unions.
Id. 101 S.Ct. at 2724 (first emphasis added).
The restrictions imposed on the political activity of most veterans’ organizations show that Congress has consistently responded to any perceived ‘impurity’ in the philanthropic purposes of those organizations.51 The fact that it has chosen to do so by means other than an amendment to the Tax Code does not lessen the respect we owe its judgment. Congress is free not only to take “one step at a time” in solving a perceived problem, but also to choose different forms of solutions to such problems. “That first amendment interests are implicated should begin, not end our inquiry.” Citizens Against Rent Control v. City of *762Berkeley, - U.S. -, -, 102 S.Ct. 434, 444, 70 L.Ed.2d 492 (1981) (White, J., dissenting). As the Court stated in California Medical Association, even within the area of regulations touching on protected speech, Congress may determine “that these entities have differing structures and purposes, and that they therefore may require different forms of regulation in order to protect the integrity of the electoral process.” 101 S.Ct. at 2724 (emphasis added).
IV.
There is unanimous agreement that the lobbying restriction in section 501(c)(3) does not impose an unconstitutional burden upon the exercise of Taxation’s first amendment rights. The majority holds, however, that by not imposing upon veterans’ organizations an identical restriction — the threat of losing their tax benefits under the Internal Revenue Code — Congress unconstitutionally discriminated against Taxation.
In my opinion, that holding fails to accord Congress the respect it is due, even in areas where regulation may place an indirect burden on first amendment interests, when legislating to insure that the public interest is best served. To the extent it ignores the fact that Congress has used means besides the tax system to regulate the otherwise fully protected political activity of veterans’ groups, the majority leaps peremptorily past the threshold question of whether section 501(c)(3) groups are in fact discriminated against at all. California Medical Association v. FEC, supra. To the extent that it fails to take cognizance of the gradual development of the law governing political activity by exempt organizations which began with the passage of the lobbying restriction in 1934 and which continues into the present52 — with explicit solicitude for the first amendment interest at stake — the majority fails to afford Congress the respect due it in this field of endeavor. Buckley v. Valeo, supra.
Veterans’ organizations are essentially different in character from other charitable and educational groups. They are particularly distinguishable from organizations like Taxation that are avowedly incorporated and operated chiefly or exclusively for the purpose of lobbying Congress on matters of public finance. Congress, in any event, was clearly justified in drawing that distinction, and in treating what it perceived to be abuses of the tax laws as it has here. Section 501(c)(3) accomplishes that objective in a wholly content-neutral way, and is therefore consistent with the constraints of the first amendment.
While the majority attributes the system of regulation here challenged to simple congressional “inadvertence,” maj. op. at 731, I would afford it the respect dictated by Buckley and counseled by a long and sorry history of judicial forays into the legislative province. Here, Congress has treated veterans’ groups differently from the vast undifferentiated mass of organizations claiming educational and charitable purposes. It has recognized that veterans’ groups are unique entities having “differing structures and differing purposes, and that they therefore may require different forms of regulation ...” California Medical Association, supra, 101 S.Ct. at 2724. Nothing in the majority opinion is persuasive either of the incorrectness of that conclusion or of Congress’ lack of authority to legislate on the basis of it.
I therefore respectfully dissent.
ROBB and WILKEY, JJ., join herein.

. Section 501(c)(3) applies to:
Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes ... no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.
(emphasis added). Such organizations are exempt from taxation under the income tax subtitle unless such exemption is denied under I.R.C. §§ 502, 503, or 504, sections with which we are not concerned in this appeal. Wholly apart from the issues raised by the lobbying restriction, it could be seriously questioned how an organization the avowed purpose of which is the lobbying of Congress has a ‘religious, charitable, scientific, testing for public safety, literary or educational purpose’ that brings it within § 501(c)(3) in the first instance.

. Tax benefits accruing to a § 501(c)(3) organization include: exemption from income tax by virtue of § 501(a); exemption from § 3111(a)’s federal social security (FICA) taxes by virtue of § 3121(a), (b)(8)(B); and exemption from § 330 l’s federal unemployment (FUTA) taxes by virtue of § 3306(b), (c)(8).

. I.R.C. § 170 provides for the deduction of contributions from income tax:
(a) Allowance of deduction.—
(1) General rule. — There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. . . . (c) Charitable contribution defined. — For purposes of this section, the term “charitable contribution” means a contribution or gift to or for the use of — ■
(2) A corporation, trust, or community chest, fund, or foundation—
(A) created or organized in the United States or any possession thereof, or under the law of the United States, any State, the District of Columbia, or any possession of the United States;
(B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals;
(C) no part of the net earnings of which inures to the benefit of any private shareholder or individual; and
*746(D) Which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office. [Emphasis added.]
Similar language permits donors to make analogous deductions with respect to the gift tax, I.R.C. § 2522(a)(2) (citizens or residents) & (b)(2) (nonresident aliens), and the estate tax, I.R.C. §§ 2055(a)(3) (citizens or residents) & 2106(a)(2)(A)(ii) (nonresident aliens).
In addition, foundations may be deterred from contributing to an organization that fails the lobbying test for section 501(c)(3) status because otherwise untaxed foundations and their managers are subject to tax if the foundation pays any amount “to carry on propaganda, or otherwise to attempt, to influence legislation.” I.R.C. § 4945(a), (d)(1).

. Section 501(c)(4) applies to:
Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
Taxation is the product of a merger between two organizations, one (Taxation with Representation Fund) a § 501(c)(3) group devoted to courtroom advocacy, and the other (Taxation with Representation) a § 501(c)(4) group devoted to legislative advocacy. See J.A. at 16.

. Taxation could also seek to qualify under I.R.C. § 501(h), which permits some § 501(c)(3) organizations to devote specified quantities of their exempt purpose expenditures to lobbying, rather than adhere to the less certain “substantiality” test of § 501(c)(3). In the district court, however, Taxation expressly disavowed any intention to make an election under § 501(h). J.A. at 15-16. See discussion at 755-756 infra.

. Section 7428 authorizes certain courts to issue declaratory judgments in certain cases relating to the status and classification of organizations under 26 U.S.C. § 501(c)(3).

. Taxation also originally challenged the validity of permitting businesses to deduct their lobbying expenses as “ordinary & necessary” business expenses. See I.R.C. § 162(e). That contention was not pursued before the court en banc, and we do not reach its merits here.

. See note 4 supra.

. Taxation’s papers in the district court made clear that it absorbed the functions of the taxpayer organization that lost in Taxation with Representation. See J.A. at 16-18. The record before the district court also establishes that Taxation has the same chief executive as had Taxation with Representation, the appellant in the Fourth Circuit case, compare id. at 14 with id. at 16, and employs the same attorney, compare id. at 6 with 585 F.2d at 1220. Despite this close relationship between issues and parties, the Government has not pleaded or argued that Taxation should be precluded, as a matter of res judicata or collateral estoppel, from litigating the issues the Fourth Circuit decided against Taxation with Representation.
Although collateral estoppel and res judicata are waivable affirmative defenses under Fed.R. Civ.P. 8(c), some courts have addressed the preclusion issue sua sponte where information within their notice has effectively relieved the defendant of his usual burden of proof on the issue. E.g., Boone v. Kurtz, 617 F.2d 435, 436 (5th Cir. 1980) (“[Ejven though Fed.R.Civ.P. 8(c) denominates res judicata as an affirmative defense[,j [dismissal by the court sua sponte on res judicata grounds ... is permissible in the interest of judicial economy where both actions were brought before the same court”); Gullo v. Veterans Coop. Housing Ass’n, 269 F.2d 517, 517 (D.C.Cir.1959) (trial court may apply res judicata upon taking notice of parties’ previous case); Wilson v. United States, 166 F.2d 527, 528-29 (8th Cir. 1948) (appellate court on own motion may determine action is barred by res judicata); Holmes v. United States, 231 F.Supp. 971, 972-73 (N.D.Ga.1964), aff'd, 353 F.2d 785 (5th Cir. 1965) (court, apparently on own motion, took judicial notice of prior proceedings and applies res judicata on defendants’ motion for summary judgment). Accord, cases cited in United States v. Sioux Nation, 448 U.S. 371, 432, 100 S.Ct. 2716, 2749, 65 L.Ed.2d 844 (1980) (Rehnquist, J., dissenting). See also Southern P. R.R. v. United States, 168 U.S. 1, 55-61, 18 S.Ct. 18, 29-32, 42 L.Ed. 355 (former judgment held conclusive even though estoppel not specially pleaded).
The rationale for sua sponte action on questions of preclusion is that relitigation should be precluded not simply to serve defendant’s interest in avoiding litigation, but also to avoid judicial waste and to foster reliance on judicial decisions. Wilson v. United States, supra, 166 F.2d at 528-29; see generally Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (1979) and authorities cited. The defendant’s consent to relitigation cannot always be decisive, for there is an independent public interest “in preventing the misallocation of judicial resources and second guessing prior panels of Art. Ill judges when the issue has been fully and fairly litigated in a prior proceeding.” United States v. Sioux Nation, supra, 448 U.S. at 433, 100 S.Ct. at 2749 (Rehnquist, J., dissenting).
We are thus tempted to determine whether Taxation should be estopped to litigate the same issues on which Taxation with Representation lost in the 4th Circuit. However, the Government’s failure to plead preclusion at any stage of this litigation deprived Taxation of an opportunity to argue that such defense should not apply, and it is not clear that Taxation has no arguable objection to such application. We thus have a choice of remanding for a hearing on that issue, see, e.g., Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971) (remanding to permit defendant to plead collateral estoppel and plaintiff to challenge the plea), or of disposing of Taxation’s case on the merits. The original panel determined that judicial economy would be best served by taking the latter course, and so proceeded to the substantive issues, as we have determined to do here.

. “[l]f a classification would be invalid under the Equal Protection Clause of the Fourteenth Amendment, it is also inconsistent with the due process requirement of the Fifth Amendment.” Johnson v. Robison, 415 U.S. 361, 364 n.4, 94 S.Ct. 1160, 1164 n.4, 39 L.Ed.2d 389 (1974). See Buckley v. Valeo, 424 U.S. 1, 93, 96 S.Ct. 612, 670, 46 L.Ed.2d 659 (1976).

. We consider primarily the denial of tax exemption for Taxation’s own income, but note that there is no serious question as to Taxation’s standing to challenge conditions upon the deductibility of donors’ contributions to it. It is our understanding that in doing so, Taxation is asserting its own rights, and not the rights of third party potential donors not before the court.

. Speiser invalidated a requirement that persons seeking to qualify for a state constitutional property tax exemption for veterans sign a loyalty oath. The Court held that the requirement improperly created a presumption of disloyalty on the part of applicants the burden of overcoming which impermissibly chilled the applicants’ exercise of their speech rights. “The man who knows that he must bring forth proof and persuade another of the lawfulness of his conduct necessarily must steer far wider of the unlawful zone than if the state must bear these burdens.” 357 U.S. at 526, 78 S.Ct. at 1342.

. As the Supreme Court has noted, many contributors “simply will not make donations to an organization that does not appear” on the Cumulative List of exempt organizations published by the IRS. Bob Jones University v. Simon, 416 U.S. 725, 729-30, 94 S.Ct. 2038, 2042-43, 40 L.Ed.2d 496 (1974).

. As Taxation conceded in its brief before the original panel in this case, “in establishing a benefit program, the Government may include requirements that are necessary to assure that the objects of the program are attained.” Taxation Br. filed 8/1/79 at 14 n.5. See Buckley v. Valeo, 424 U.S. 1, 57 n.65, 96 S.Ct. 612, 653 n.65, 46 L.Ed.2d 659 (1976); Community-Service Broadcasting of Mid-America, Inc. v. FCC, 593 F.2d 1102, 1129 (D.C.Cir.1978) (en banc); Note, Unconstitutional Conditions, 73 Harv.L. Rev. 1595, 1600 (1960).

. See generally Redish, The Content Distinction in First Amendment Analysis, 34 Stan.L. Rev. 113, 114-18 (1981).

. We focus on cases relating to content restrictions based upon subject matter because they involve the Court’s broadest reading of the term “content.” In cases involving the invalidation of restrictions based on the particular viewpoint of a speaker on a given subject, the distinction between such restrictions and § 501(c)(3) is even plainer. See, e.g., First Nat’l Bank v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978) (invalidating statute which limited corporate speech to protection of corporations’ business interests).

. This is not the type of legislative directive to “stick to business” invalidated in First National Bank v. Bellotti, supra, 435 U.S. at 785, 98 S.Ct. at 1420 (“If a legislature may direct business corporations to ‘stick to business,’ it may also limit other corporations — religious, charitable or civic — to their respective ‘business’ when addressing the public.”). The statute struck down in that case limited corporate speech on referendum issues to instances in which the corporation’s interests were presumed (by the statute itself) to be affected. Section 501(c)(3) does not operate in any way to restrict the subjects upon which Taxation may lawfully speak, nor does it condition Taxation’s receipt of tax benefits upon the subjects it addresses. The lobbying restriction is entirely neutral with respect to the subject matter of the legislation sought to be inñuenced. Section 501(c)(3) merely requires charitable and educational or*751ganizations to spend the fruits of their special tax status in ways that Congress finds to be consistent with the purposes for which that status was created, i.e., to further charitable and educational purposes. See discussion at 752-753 infra.

. The other asserted governmental interest was protection of residents’ privacy from the intrusions of door-to-door solicitors. 444 U.S. at 638 -39, 100 S.Ct. at 837-38.

. The nature of the governmental interest expressed by the lobbying restriction is more fully discussed at 752-753

. The Supreme Court recently reaffirmed the appropriateness of the O’Brien standard in cases not involving content-based restrictions. Consolidated Edison Co. v. Public Service Comm’n, 447 U.S. 530, 540 n.9, 100 S.Ct. 2326, 2335 n.9, 65 L.Ed.2d 319 (1980).

. A survey of the various exemptions stated in § 501(c) will reveal the general types of interests Congress sought to protect. See I.R.C. § 501(c)(l)-(22).

. "Americans United,” Inc. v. Walters, 477 F.2d 1169, 1183 (D.C.Cir.1973) (concurring opinion), rev'd on jurisdictional grounds sub nom. Alexander v. “Americans United” Inc., 416 U.S. 752, 94 S.Ct. 2053, 40 L.Ed.2d 518 (1974) (emphasis in original). See also Bob Jones University v. Simon, 416 U.S. 752, 772 & n.8, 94 S.Ct. 2038, 2044 & n.8, 40 L.Ed.2d 496 (1974) (Blackmun, J., dissenting); Haswell v. United States, 500 F.2d 1133, 1150 (Ct.Cl.1974).

. The majority suggests that “it would be grossly simplistic” to attribute much significance to this exchange. Majority op. at 736. Since I take the view that this evidence only confirms the intent obvious from the face of the statute, extended discussion of the proper weight to be accorded it is unnecessary.

. Judges and commentators have frequently noted the dangers inherent in judicial attempts to refine regulatory schemes, even where undertaken in order to enforce compliance with the first amendment. See, e.g., Central Hudson Gas & Electric Corp. v. Public Service Comm’n, supra, 447 U.S. at 599-606, 100 S.Ct. at 2368-2371 (1980) (Rehnquist, J., dissenting); Cox, The Supreme Court, 1979 Term — Foreword: Freedom of Expression in the Burger Court, 94 Harv.L.Rev. 1, 35 (1980) (questioning the “close judicial analysis of policy alternatives [in Central Hudson ], with the burden put upon the state to foresee and negate all the alternatives that the Court can imagine . . . ”).

. The parties did not focus on the significance of § 501(h) in their arguments before this court. Taxation’s ability and willingness to elect coverage under § 501(h), see discussion at 755-756 infra, need not be considered, however for we rely on that section not simply as affording Taxation a less restrictive alternative in fact, but also as a source of guidance in evaluating the existing scope of § 501(c)(3).

. At least as early as 1972, Congress held hearings on the problems posed by § 501 (c)(3)’s lobbying restriction. See Legislative Activity by Certain Types of Exempt Organizations: Hearings Before the House Comm, on Ways and Means, 92d Cong., 2d Sess. (1972). Several bills were introduced in earlier sessions on the subject prior to the ultimate adoption of section 501(h) by the 94th Congress in Pub.L.No. 94-455, 90 Stat. 1520 (1976). See H.R.Rep.No. 94-1345, U.S. Code Cong. & Admin.News 1976, p. 5433, 122 Cong. Rec. 16886 (June 8, 1976). According to Congressman Ullman, the sponsor of the bill that ultimately became § 501(h), “further decisions were made in committee markup sessions in 1974 . . . Throughout 1975, the Treasury Department, many of the charitable organizations interested in these proposals, and representatives of major religious organizations all joined with staff members to reach agreements ...” Id.
(Although section 501(h) and its related provisions were passed as part of the Tax Reform Act of 1976, Pub.L.No. 94-455, the tax writing committees of both houses originally considered the measure as a separate bill, H.R. 13500. See H.R.Rep.No. 94-1210, U.S.Code Cong. & Admin.News 1976, p. 6640; S.Rep.No. 94-938, S.Rep.No. 94-1236, U.S.Code Cong. & Admin.News 1976, p. 2897, (conference report) (all 94th Cong., 2d Sess. (1976)).

. Taxation has declined to do so. We discuss the significance of this decision at 755-756, infra.

. I.R.C. § 4911(c) sets forth the formulae for determining the maximum expenditures permitted.

. Congress in facing the question of legislative activity by exempt organizations could have chosen to repeal the lobbying restriction. This it declined to do, suggesting that doubts about the purpose of that section as adopted in 1934 are largely misconceived.

. Particularly noteworthy is § 4911’s “sliding scale” definition of the permitted level of political expenditures. This provision was included as an alternative to the § 501(c)(3) “substantial part” test, which created the possibility that two organizations of different size which spend the same dollar amount on lobbying would be treated differently because that amount bears a different relationship to the total expenditures of the organizations. See 122 Cong.Rec. S16884 (daily ed. June 8, 1976); see also “Americans United,” Inc. v. Walters, 477 U.S. 1169, 1173 (D.C.Cir.1973), rev’d on jurisdictional grounds sub nom. Alexander v. “Americans United” Inc., 416 U.S. 752, 94 S.Ct. 2038, 40 L.Ed.2d 496 (1974).

. It is noted that Taxation, while adverting in its affidavit to the alleged vagueness of terms used in §§ 501(h) and 4911, raised no similar vagueness objections to § 501(c)(3). Considerable deference should also be paid to the specific quantitive standards set forth in the statute. See Buckley v. Valeo, 424 U.S. 1, 30, 83, 96 S.Ct. 612, 640, 665, 46 L.Ed.2d 659 (1976).

. See, maj.op. Part IIA.

. See New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976) (per curiam).

. Assuming the absence of other congressional limits upon such activity. Limits of this sort in fact presently exist with respect to veterans’ organizations chartered by Act of Congress. See, e.g., 36 U.S.C. § 90f (1976) (DAV shall be nonpolitical and may not support any candidate for office). There are discussed at 760-761 infra.

. A contrary rule would place upon government the obligation of providing equal resources to all who would publish their views on any subject. That no such obligation exists is obvious, as the majority notes. Maj.op. at 726.

. Because the majority appears to agree that the statute read in conjunction with Treasury regulations does in fact restrict the lobbying activities of fraternal societies in a fashion similar to § 501(c)(3), this discussion is confined to Taxation’s claims regarding veterans’ groups.

. H.R.Rep.No. 92-851, 92d Cong., 2d Sess. 2 (1972); S.Rep.No. 92-1082, 92d Cong., 2d Sess. 2 (1972), U.S.Code Cong. & Admin.News 1972, p. 3142.

. Given this recent interpretation by Congress, the pre-1934 legislative history cited by the majority, maj. op. at 732-733, is of little value. Whatever one might make of the “prehistory” of the lobbying restriction, since 1934 Congress has without deviation taken the view that veterans’ organizations and section 501(c)(3) organizations are essentially different in character.

. The initial focus of the decision to deny these benefits to groups that lobbied was not upon the organizations’ exempt status, but upon the deductibility of contributions to them. The condition placed upon exempt status which now appears in § 501(c)(3) was adopted in order to complement the denial of deductions for contributions to groups that lobby that is now § 170(c)(2)(D). See S.Rep.No. 558, 73d Cong., 2d Sess. 30 (1934) (explaining change in exemption rules under the 1939 Code (prior § 101(6) by reference to change in deductibility under prior § 23(b)). This fact further supports the view that the principal intent of Congress in imposing the lobbying restriction was to curtail self-serving “donations” incompatible with the charitable purposes Congress sought to further.

. Williamson v. Lee Optical, 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955).

. The Court in Buckley cited the Campaign Act’s character as a “reform” measure, id. 424 U.S. at 105, 107, 96 S.Ct. at 675, 676. The courts have long recognized, as the already cited legislative history itself makes clear, that section 501(c)(3) is a similar sort of remedial measure. See, e.g., Seasongood v. Commissioner, 227 F.2d 907, 910 (6th Cir. 1955); “Americans United," Inc. v. Walters, 477 F.2d 1169, 1183 (D.C.Cir.1973) (Wilkey, J„ concurring), rev’d on jurisdictional grounds sub nom. Alexander v. “Americans United” Inc., 416 U.S. 752, 94 S.Ct. 2038, 40 L.Ed.2d 496 (1974). The status of an Act of Congress as a “reform” measure is a question to be determined by reference to the intent evidenced by Congress in adopting it, and not to the predilections of a reviewing court. “Evils in the same field may be of different dimensions and proportions, requiring different remedies. Or so the legislature may think.” Williamson v. Lee Optical, 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955) (emphasis added).

. Buckley v. Valeo, 424 U.S. at 98, 96 S.Ct. at 672.

. The fact that the reform implemented by the lobbying restriction was first adopted in 1934 does not undermine its status as a proper “first step.” The various statutory changes adopted since that time — the enactment of sections 501(h) (discussed at 753-755 supra) and 527 (regulating political action committees) — illustrate the continuing attention paid by Congress to this area in the intervening years.

. Other veterans’ organizations are similarly incorporated. See note 47 infra.
Under standards adopted by the House and Senate Judiciary Committees, federal charters are granted only to organizations of “unique character,” and which are “organized and operated solely for charitable, literary, educational, scientific, patriotic or civic improvement purposes ... as nonpartisan and nonprofit organization^] ...” S.Rep.No. 97-37, 97th Cong., 1st Sess. 2 (1981).

. Buckley v. Valeo, 424 U.S. at 97, 96 S.Ct. at 972.

. Id.

. See also 36 U.S.C. § 46 (1976) (American Legion “shall be nonpolitical and, as an organization, shall not promote the candidacy of any person seeking public office”); id. § 67d (“No part of the activities of [American Veterans of World War II] shall consist of carrying on propaganda” or of supporting any political party or candidate); id. § 86 (Blind Veterans of World War 1 “shall be nonpolitical and shall not be used for the dissemination of partisan principles”); id. § 1153 (Paralyzed Veterans of America).

. Pub.L.No. 97-82 § 8(c), 95 Stat. 1092 (Nov. 20, 1981); Pub.L.No. 97-83 § 8(c), 95 Stat. 1095 (Nov. 21, 1981) (emphasis added).

. See id.

. This is most clearly the case in the instance of contributions sought to be deducted from the estate tax under section 2055(a)(4). That section makes contributions to veterans’ organizations deductible only if the contribution is “to or for the use of any veterans’ organization incorporated by Act of Congress ...” Any conditions placed upon the political activities of these groups in their corporate charters, then, are explicitly incorporated into the provision governing the deductibility of contributions, and the effect is as if section 2055 itself imposed the restriction on political involvement.

. I fail to see the relevance to the lobbying restriction here under scrutiny of the majority’s assertion that one veteran’s organization “endorsed a presidential candidate in the 1980 election.” Maj. op. at 723 n.15. In actuality, it appears from the cited news source that it was a Political Action Committee formed by members of a veteran’s organization that made the endorsement. (Wash.Post, Jan. 17, 1980). See N.Y. Times, Aug. 9, 1980, at 6 (“To avoid risking its tax-exempt status, the V.F.W. last year created a separate political action committee to back candidates.” (emphasis added)). In view of the various restrictions imposed upon such committees, both under the Federal Election Campaign Act, e.g., 2 U.S.C. § 441a(a)(l)(C) (1976) and under the Tax Code itself, see 26 U.S.C. § 527, the majority’s comment is of no moment. Indeed, the restrictions imposed upon political committees go further to demonstrate the close attention given these concerns by Congress.

. See 760-761 supra.