DALLAS (CN) - A Republican-affiliated group that says the Internal Revenue Service illegally targets conservative groups seeks partial summary judgment on its claim that the IRS uses an unconstitutional test to determine tax-exempt nonprofit status.
Dallas-based Freedom Path sued the IRS and Lois G. Lerner, the former director of the agency's Exempt Organizations Division, in April 2014 in Federal Court. It claimed that as early as February 2010, the agency targeted tax-exempt applications from groups with names including the words "Tea Party" and "Patriots," asking for unnecessary information such as donor names.
Last Wednesday, Freedom Path asked the court to grant partial summary judgment because the IRS' "facts and circumstances" test is too vague and violates the Fifth Amendment.
"Pursuant to Revenue Ruling 2004-6, the determination of whether a communication constitutes issue advocacy versus an exempt-function activity (i.e., political campaign intervention) is based upon a highly subjective evaluation of all the facts and circumstance on each case, instead of by reference to any clearly defined bright-line rules," the 29-page memorandum in support of the motion states.
Freedom Path says it has "no way of knowing" what speech is protected and what speech would harm its tax-exempt nonprofit status.
"Revenue Ruling 2004-06 essentially establishes the IRS' position with respect to campaign intervention activity as 'we know it when we see it,'" the memo states. "And social welfare organizations must guess how much of each kind of activity is allowed and whether they should track their activities based on the dollars spent, time spent, or other measures. Again, even the IRS has publicly acknowledged that the 'facts and circumstances' test is ambiguous and confusing."
Freedom Path says the IRS' use of subjective intent suggests vagueness, citing a Seventh Circuit ruling that concluded the test "is no standard at all, and makes the tax status of organizations and their donors a matter of the whim" of the agency.
The group calls the test an impermissible burden on free speech "because it sweeps into 'exempt-function activity' speech that is clearly issue advocacy, and it is a tool of viewpoint discrimination the IRS has been deploying against speakers for years."
Lerner was dismissed from the lawsuit in February 2015.
The Justice Department declined to charge her with criminal wrongdoing eight months later.
IRS Commissioner John Koskinen refused to step down in September as he defended himself from Republicans' impeachment attempts.
He insisted he had not purposefully misled Congress in its investigation of the alleged political targeting.
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