The federal government has granted tax-exempt status to more than 60 controversial nonprofits branded by critics as “hate groups,” including anti-immigrant and anti-gay-rights organizations, white nationalists, and Holocaust deniers, according to a Chronicle of Philanthropy analysis.
The issue is a thorny one for the Internal Revenue Service, which must balance First Amendment rights against concerns that it is essentially granting government subsidies to groups holding views that millions of Americans may find abhorrent….
Though tax exemption is intended to be available to groups espousing a wide range of views, [Prof. Frances] Hill worries that the concept of a nonprofit organization has become too malleable. “The idea of tax-exempt organizations devoted to hate speech is just corrosive of everything that the tax-exempt sector says it stands for.”
Yet the IRS is in an impossible position, she said. Still shaken by the revelation that agency leaders had singled out conservative advocacy groups’ applications for tax-exempt status for extra scrutiny, the IRS has little incentive to investigate organizations based on the content of their messages.