## Facts

- Branch Ministries, Inc., doing business as The Church at Pierce Creek, is a New York church whose pastor and related individuals joined in challenging IRS action.
- Four days before the 1992 presidential election, the church bought full-page newspaper advertisements criticizing then-Governor Bill Clinton and urging readers not to vote for him.
- The ads identified Clinton by name, asserted he supported positions contrary to “God’s laws,” and ended with “How then can we vote for Bill Clinton?”
- The advertisement solicited “tax-deductible donations” to fund the ad, directing contributions to the church.
- The IRS investigated whether the church remained eligible for exemption under 26 U.S.C. § 501(c)(3), which bars participation or intervention in political campaigns on behalf of or in opposition to candidates for public office.
- After administrative proceedings, the IRS revoked the church’s § 501(c)(3) status in January 1995 based on campaign intervention, while not disputing that the entity was a bona fide church.
- The church sued to overturn the revocation; after limited discovery focused on selective enforcement, both sides moved for summary judgment.

## Issues

1. Whether the IRS lacked statutory authority to revoke a bona fide church’s § 501(c)(3) exemption without first determining it was not a “church” under the Internal Revenue Code.
2. Whether revocation for campaign intervention violated the First Amendment (free exercise and free speech) or the Religious Freedom Restoration Act.
3. Whether the revocation resulted from unconstitutional selective enforcement requiring relief.

## Decision

- The court granted the government’s renewed motion for summary judgment and denied plaintiffs’ cross-motion.
- The IRS acted within its statutory authority in revoking § 501(c)(3) status for prohibited political campaign intervention.
- The revocation did not violate the First Amendment or RFRA because it withdrew a tax benefit conditioned on statutory compliance rather than banning speech or religious exercise.
- Plaintiffs failed to establish selective enforcement because they did not show similarly situated churches were treated differently or that the IRS acted with an impermissible motive.

## Legal Principles

- Churches qualify for § 501(c)(3) exemption only if they satisfy statutory conditions, including the prohibition on participating or intervening in political campaigns (including publishing or distributing statements for or against candidates).
- The IRS may revoke § 501(c)(3) exemption when a bona fide church violates § 501(c)(3)’s campaign-intervention restriction; the agency need not first determine the entity is not a church.
- Conditioning tax exemption and the deductibility of contributions on compliance with § 501(c)(3) is treated as denial of a government subsidy for partisan electoral activity, not as direct suppression of speech or religion.
- A selective-enforcement claim requires proof of both discriminatory effect (similarly situated entities not proceeded against) and discriminatory purpose (enforcement based on an impermissible ground); generalized comparisons are insufficient.

## Conclusion

The court upheld the IRS’s revocation of a church’s § 501(c)(3) tax-exempt status after it published a candidate-specific election advertisement and solicited tax-deductible donations to support it, rejecting statutory, constitutional, RFRA, and selective-enforcement challenges.


Branch Ministries, Inc. v. Rossotti, 40 F. Supp. 2d 15 (D.D.C. 1999)