Are all of those groups that are trying to influence the Senate on the Supreme Court nomination of Robert Bork actually lobbying? The question is not academic; it could be a real issue of dollars and cents to both the groups involved and to their supporters.
The tax code puts severe limitations on the kind of politicking that can be done by organizations registered as tax-exempt. If they go too far, the organizations lose that status. That means extra expenses for them -- not just income taxes, but also the loss of perks such as low bulk mailing rates and avoidance of sales taxes.
It also means that their contributors no longer can take as a personal tax deduction the amount they give the groups or incidental the expenses such as mileage, tolls and parking costs that they incur on organization business.
The oversight subcommittee of the House Ways and Means Committee has been prodding the Treasury to be tougher about enforcing those limitations, and has put together a bill giving the Internal Revenue Service more resources to do just that.
Tax-exempt charities cannot take part at all in partisan politics -- advocating or opposing the election of certain candidates. They can, however, try to affect the shape of legislation as long as that is not a "substantial" part of their overall activity.
One measure of what is or is not "substantial" says that such efforts should absorb no more than one-fifth of a group's total budget. A group that has a strong public policy component is obviously interested in counting as much of that as it can as nonlobbying, so it is in no danger of hitting that 20 percent ceiling.
That's why a special report written for Tax Analysts by two Washington lawyers, Gail Harmon and Andrea Ferster, is generating so much interest. The two, both specialists in the law of tax-exempt organizations, argue that trying to influence the Senate on judicial nominations is not lobbying at all.
There is little -- either in the way of IRS regulations or judicial decisions -- to define what is or is not lobbying. But in 1976 Congress, in adding to the Tax Code the 20 percent definition of "substantial," defined lobbying as an attempt to influence "legislation," and defined "legislation" as any action involved in the "introduction, amendment, enactment, defeat or repeal of acts, bills, resolutions, or similar items."
When the lawmakers vote on a presidential appointment, the question before them is, "Will the Senate advise and consent to this nomination?" The key issue for the tax-exempts, then, is how "similar" that vote is to one on a bill or resolution.
Harmon and Ferster insist that it is not at all. Legislation is meant to create general rules for how citizens are to behave; a confirmation vote is, in contrast, extremely specific to only a single individual.
Moreover, "acts, bills, and resolutions" always consist of a specific text that the lawmakers are voting for or against, they point out. There is no such text involved in a confirmation vote. In fact, the confirmation process is not mentioned in the part of the Constitution that describes the role of Congress in the government, but in the part outlining presidential authority. The two lawyers also note that upcoming confirmation votes are not listed on the Senate's legislative calendar, but on the executive calendar.
All that makes a good case that leaning on senators to vote for or against a pending nomination is not "lobbying" as far as the tax laws that govern charitable groups are concerned.
But that is far from an iron-clad guarantee that the nonprofit group will win if the IRS decides to challenge the expenditure. "Even the most well-reasoned construction of IRS's own regulations may not carry the day in the present climate, in which the lobbying and political activities of exempt organizations are undergoing intense scrutiny," Harmon and Ferster warn.
Last month, the IRS convened a new Exempt Organizations Advisory Group to come up with ways to respond to that new scrutiny. On the same day the group was discussing the issue, the U.S. Tax Court decided to be more lenient than the government wanted on the question of tax-exempt groups affecting judicial selection.
In a case involving the Association of the Bar of the City of New York, it was looking not at the limitations on lobbying, but on the absolute ban on charities getting involved in electoral politics, since the controversy involved state judges who are elected rather than appointed.
The bar group regularly rates candidates for judgeships, classifying them as not approved, approved or highly qualified. It makes no major effort to get its ratings around to the voters, but it does issue a press release on its conclusions, and the information is usually treated as a significant news story.
The IRS said that added up to forbidden political activity, but the Tax Court, over six dissenting votes, allowed the ratings. Although it is "obvious that the ratings are published with the hope that they will have an impact on the voter," Chief Judge Samuel B. Sterrett said, merely by issuing press releases the group "does not actively seek to influence the outcome of elections."Moskowitz covers legal affairs for McGraw-Hill World News.