## Facts

- The Association of the Bar of the City of New York was historically exempt from federal income tax under I.R.C. § 501(c)(6) and sought recognition under I.R.C. § 501(c)(3) to obtain more favorable tax treatment, including deductibility of contributions.
- The Association conducted a judicial candidate evaluation program covering both appointive and elective judgeships at municipal, state, and federal levels.
- A committee reviewed judicial candidates and assigned public ratings, including “approved,” “approved as highly qualified,” and “not approved.”
- The Association asserted the ratings were nonpartisan and based on professional criteria such as competence, integrity, temperament, and experience, rather than party affiliation or ideology.
- The Association publicly disseminated the ratings and stated a purpose of preventing unqualified persons from becoming judges.
- The IRS denied § 501(c)(3) recognition, concluding the public ratings constituted participation or intervention in political campaigns because they could influence electoral outcomes.
- The Tax Court ruled for the Association, holding the ratings were consistent with charitable and educational purposes and did not amount to prohibited campaign activity.
- The Commissioner appealed the Tax Court’s decision to the Second Circuit.

## Issues

1. Whether the Association’s public rating of candidates for elective judicial office constitutes “participation in, or intervention in … any political campaign on behalf of (or in opposition to) any candidate for public office” under I.R.C. § 501(c)(3).
2. If the rating program is campaign intervention, whether that activity disqualifies the Association from recognition as a § 501(c)(3) organization despite its otherwise charitable and educational activities.

## Decision

- The Second Circuit reversed the Tax Court.
- The court held that publicly rating named candidates for elective judicial office constitutes prohibited political campaign intervention under § 501(c)(3).
- The court concluded that because § 501(c)(3) contains an absolute prohibition on campaign intervention, the Association was not eligible for § 501(c)(3) recognition.

## Legal Principles

- The § 501(c)(3) prohibition on political campaign participation or intervention is absolute and is not subject to a “substantial part” test.
- “Publishing or distributing of statements” for or against a candidate includes candidate-specific ratings that communicate approval or disapproval to the electorate.
- Nonpartisan intent and reliance on professional, merit-based criteria do not remove candidate-specific public communications from the scope of campaign intervention when they are reasonably viewed as taking a position on a candidate’s election.
- General educational activities about legal issues or judicial administration may be consistent with § 501(c)(3), but communications that single out named candidates in the context of an election constitute impermissible campaign intervention.

## Conclusion

The Second Circuit held that the Association’s public, candidate-by-candidate judicial ratings were designed to affect electoral outcomes and therefore constituted prohibited political campaign intervention under I.R.C. § 501(c)(3), requiring denial of § 501(c)(3) recognition.


Ass’n of the Bar of the City of N.Y. v. Comm’r, 858 F.2d 876 (2d Cir. 1988)