In case you were wondering whether the IRS was prone to using peoples' political views as criteria for assessing their eligibility for tax-exempt status, listen to this phone call that a pro-life group recorded with an IRS agent. The agent, Sherry Wan, clearly does not speak English as her first language, so you may want to follow along with the transcript.
You could speak to your value. OK. So that’s why, that’s why this is kind of like you know, kind of, you started from the beginning, I feel that when you’re talking to the [unintelligible] my religion, my religion [unintelligible]. And like I said, you have the right to believe. You have the right to do, your religion told you what’s right. You have a right to, you know, outreach to other people. But meanwhile, you have to know your boundaries. You have to know your limits. You have to respect other people’s beliefs. You have somebody else come to your door and know you don’t like them. When they come to you, how do you feel? [unintelligible]
Sherry Wan does not seem to be worried about whether this group is conducting illegal protests (an activity which is not allowed for tax exempt groups, or indeed, anyone else.) Rather, she's telling them that activities outside of abortion clinics will disqualify them, because they can't force their views on people who disagree with them. This will surely come as a surprise to 501(c)(3) Greenpeace.
I've seen a number of criticisms of this on the grounds that what Pro-Life Revolution was doing was constitutionally protected speech. This is neither here nor there. Asking my congressman to pass a law against neighbors who let their crab grass get out of control is constitutionally protected speech, but a 501(c)(3) cannot engage in it while also keeping their tax exemption.
I've seen a number of defenses of the IRS on the grounds that this is clearly political activity, and tax exempt organizations can't engage in political activity. These people--like IRS Agent Sherry Wan--seem confused about what sort of activity is forbidden to tax exempt groups. Legal access to abortion is a contentious political issue. You are not allowed to have a 501(c)(3) that lobbies for legislation, or tries to get pro-life politicians elected. But as I understand the law, that doesn't mean that you can't have a 501(c)(3) which tries to change peoples' minds about having abortions. The personal isn't that political.
IRS Agent Sherry Wan seems to have conjured an entirely new definition of political activity, one which includes "trying to convince people who would rather not hear your message" and "upsetting people who are seeking an abortion". This seems to be a fairly common sentiment in my neck of the woods. But I don't think it's correct. I'm sure that people who work for various companies would rather not be upset by Greenpeace protesters outside of their workplaces, but that doesn't mean that Greenpeace has to pack up and go home.
If you're not convinced, turn it around: lots of parents want teaching about birth control to be done at home. This is a political issue in many areas. But it would be ludicrous to say that you couldn't have a 501(c)(3) which teaches teens about birth control--even one that approaches teenagers who might feel uncomfortable with the solicitation.
The fundamental problem with the IRS scandals is that it's hard to imagine an IRS agent telling that second 501(c)(3) that they couldn't pass out brochures because the teenagers, or the parents, might get upset. For that matter, it's hard to imagine them telling Planned Parenthood that they weren't allowed to make information about abortion available when and where they pleased. Conservatives aren't wrong to worry that there is a structural bias against them. Their educational outreach, their protests, their issues are seen as being uniquely provoking and "political", while the other side is not. It's not that no left-wing group would ever get disqualified for protests; rather, it's that what the left-wing group would have to do to get this sort of attention would have to be much more extreme.
To my mind, this is why we should get rid of the corporate income tax--and the charitable tax deduction as well. Companies spend an enormous amount of time and money trying to structure their activity to get favorable tax treatment. Non-profits and labor unions engage in elaborate games to push as far as possible without actually breaking the law. And unelected bureaucrats are given enormous power to tell people what is and is not allowed--decisions that may have more to do with their personal feelings about the activity than the actual law. Then we all spend more time and money going into court to fight about it.
When government has power, it will be abused. Sometimes that's the unavoidable side effect of something we need to do. But this isn't. It's time to junk the entire elaborate system.
