## Facts

- Branch Ministries, Inc. (The Church at Pierce Creek) was treated as a tax-exempt church under 26 U.S.C. § 501(c)(3), and its donors could claim deductions under 26 U.S.C. § 170.
- Four days before the 1992 presidential election, the church placed full-page newspaper advertisements urging Christians not to vote for then-candidate Bill Clinton based on identified moral and policy positions.
- The advertisements solicited tax-deductible contributions to help fund the ads and directed donations to the church.
- Section 501(c)(3) conditions tax exemption on, among other things, refraining from participating or intervening in political campaigns on behalf of, or in opposition to, candidates for public office.
- The IRS determined the advertisements constituted prohibited political campaign intervention and revoked the church’s § 501(c)(3) status.
- The church and its pastor sued, alleging (1) the IRS exceeded statutory authority, (2) violations of the Free Exercise Clause and RFRA, and (3) selective enforcement violating the Fifth Amendment.
- The district court granted summary judgment to the government after limited discovery on selective enforcement; the church appealed.

## Issues

1. Whether the IRS acted within its statutory authority in revoking § 501(c)(3) tax-exempt status based on the church’s political advertisements.
2. Whether revocation of § 501(c)(3) status for campaign intervention violated the Free Exercise Clause or RFRA.
3. Whether the IRS engaged in unconstitutional selective enforcement in violation of the Fifth Amendment.

## Decision

- The D.C. Circuit affirmed summary judgment for the IRS.
- The court held the advertisements constituted political campaign intervention prohibited by § 501(c)(3), and revocation was within the IRS’s authority.
- The court held revocation did not violate the Free Exercise Clause or RFRA because the prohibition was a neutral, generally applicable condition on a tax benefit and did not substantially burden religious exercise.
- The court rejected the selective-enforcement claim for lack of evidence that similarly situated entities were treated differently and that enforcement was based on an impermissible motive.

## Legal Principles

- An organization qualifies for § 501(c)(3) tax exemption only if it does not participate in or intervene in any political campaign on behalf of, or in opposition to, a candidate for public office.
- The IRS may revoke § 501(c)(3) status when an organization’s conduct places it outside the statutory requirements, including when a church publishes or distributes statements opposing a candidate and funds that activity through tax-deductible contributions.
- Conditioning tax-exempt status on refraining from campaign intervention is treated as a neutral, generally applicable condition on receipt of a tax subsidy and does not, without more, violate the Free Exercise Clause.
- Under RFRA, denial of a tax benefit based on violation of a neutral condition does not constitute a substantial burden where the claimant remains free to engage in the religiously motivated conduct outside the subsidized framework and has lawful alternatives for political activity.
- A selective-enforcement claim requires proof of both disparate treatment of similarly situated entities and an impermissible enforcement motive; conclusory allegations are insufficient to defeat summary judgment.

## Conclusion

The D.C. Circuit upheld the IRS’s revocation of a church’s § 501(c)(3) tax-exempt status after it ran advertisements opposing a presidential candidate and solicited tax-deductible donations to fund them, holding the revocation was authorized by statute and did not violate Free Exercise, RFRA, or the Fifth Amendment absent evidence of discriminatory enforcement.


Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000)