Supreme Court Agrees to Hear Fundraising/Free Speech Cases

• Date: 01 March 2021
• Published date: 01 March 2021
• DOI: http://doi.org/10.1002/npc.30830

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

SUPREME COURT

AGREES TO HEAR

FUNDRAISING/FREE

SPEECH CASES

The US Supreme Court, on January 8, granted certiorari in two major

cases involving the issue of forced disclosure of donor information, by fundraising

charitable organizations, to state regulators (American for Prosperity Foundation

v. Becerra; Thomas More Law Center v. Becerra). These cases concern the present

practice of the California attorney general, consisting of the demand for infor-

mation about registered charities’ donor information and the refusal of the US

Court of Appeals for the Ninth Circuit to respect constitutional law protections

afforded charities and their members and donors. The petition to the Supreme

Court observed that the Ninth Circuit “has opened the door for the major donors

of thousands of charities to be exposed and chilled through California’s dragnet.”

The question formally presented by this petition to the Court (the first Quote

of the Month in the November 2019 issue) is “[w]hether the exacting scrutiny

this Court has long required of laws that abridge the freedom of speech and

association outside the election context—and called for by NAACP v. Alabama

ex rel. Patterson … and its progeny—can be satisfied absent any showing that

a blanket governmental demand for the individual identities and addresses of

major donors to private nonprofit organizations is narrowly tailored to an asserted

law-enforcement interest.”

The posture of the Ninth Circuit in these cases is summarized in the Novem-

ber 2018 issue. The court’s refusal of a rehearing before the full appellate panel

gave rise to a vigorous dissent, which is summarized in the June 2019 issue. The

petition to the Court is summarized in the November 2019 issue.

The petition filed in the American for Prosperity Foundation case asserts that

the Ninth Circuit’s decision “warrants review because it threatens grave harm

to vital First Amendment interests on a national basis.” The appellate court’s

holding “condones compelled disclosures from tens of thousands of charities

across the country, merely because they operate and register in California.”

The petition states that the “resulting chill will be felt nationwide as numerous © 2021 Wiley Periodicals LLC

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DOI:10.1002/npc

Analysis of current developments in tax

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Volume 38 Number 3

March 2021

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Final Excess Compensation Regs

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Selected Provisions of

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Appropriations Legislation 3

IRS Applies Public Policy

Doctrine—Twice 4

IRS Chief Counsel Advises

Denials as to 27-Month

Rule Relief 4

TIGTA Evaluates EO Examination

Case Consolidation Efforts 5

Charitable Deductions Lost, on

Appeal, Due to Partial Interest

Gift and Faulty Appraisals 6

Other Recent IRS Private

Letter Rulings 7

IRS Issues Procedural Rules

for 2021 7

Taxpayer First Act Report

Delivered 8

Other Development 8