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U.S. Supreme Court

Regan v. Taxation With Representation, 461 U.S. 540 (1983)

Regan v. Taxation With Representation of Washington

No. 81-2338

Argued March 22, 1983

Decided May 23, 1983*

461 U.S. 540


Section 501(c)(3) of the Internal Revenue Code of 1954 (Code) grants tax exemption to certain nonprofit organizations "no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation." Section 170(c)(2) permits taxpayers who contribute to § 501(c)(3) organizations to deduct the amount of their contributions on their federal income tax returns. Section 501(c)(4) grants tax-exempt status to certain nonprofit organizations, but contributions to these organizations are not deductible. Taxation With Representation of Washington (TWR) is a nonprofit corporation organized to promote its view of the "public interest" in the area of federal taxation; it was formed to take over the operation of two other nonprofit organizations, one of which had tax-exempt status under § 501(c)(3) and the other under § 501(c)(4). The Internal Revenue Service denied TWR's application for tax-exempt status under § 501(c)(3) because it appeared that a substantial part of TWR's activities would consist of attempting to influence legislation. TWR then brought suit in Federal District Court against the Commissioner of Internal Revenue, the Secretary of the Treasury, and the United States, claiming that § 501(c)(3)'s prohibition against substantial lobbying is unconstitutional under the First Amendment by imposing an "unconstitutional burden" on the receipt of tax-deductible contributions, and is also unconstitutional under the equal protection component of the Fifth Amendment's Due Process Clause because the Code permits taxpayers to deduct contributions to veterans' organizations that.qualify for tax exemption under § 501(c)(19). The District Court granted summary judgment for the defendants, but the Court of Appeals reversed, holding that § 501(c)(3) does not violate the First Amendment, but does violate the Fifth Amendment.


1. Section 501(c)(3) does not violate the First Amendment. Congress has not infringed any First Amendment rights or regulated any First

Page 461 U. S. 541

Amendment activity, but has simply chosen not to subsidize TWR's lobbying out of public funds. Cammarano v. United States, 358 U. S. 498. Pp. 461 U. S. 545-546.

2. Nor does § 501(c)(3) violate the equal protection component of the Fifth Amendment. The sections of the Code at issue do not employ any suspect classification. A legislature's decision not to subsidize the exercise of a fundamental right does not infringe that right, and thus is not subject to strict scrutiny. It was not irrational for Congress to decide that tax-exempt organizations such as TWR should not further benefit at the expense of taxpayers at large by obtaining a further subsidy for lobbying. Nor was it irrational for Congress to decide that, even though it will not subsidize lobbying by charities generally, it will subsidize lobbying by veterans' organizations. Pp. 461 U. S. 546-551.

219 U.S.App.D.C. 117, 676 F.2d 715, reversed.

REHNQUIST, J., delivered the opinion for a unanimous Court. BLACKMUN, J., filed a concurring opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 461 U. S. 551.

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