## Facts

- The Internal Revenue Code exempts organizations operated exclusively for charitable and educational purposes under I.R.C. § 501(c)(3).
- Treasury Regulation § 1.501(c)(3)-1(d)(3) defines “educational” activities and states that advocacy may be educational if it presents a sufficiently full and fair exposition of pertinent facts, but not if it is the mere presentation of unsupported opinion.
- A federal appellate decision found the “full and fair exposition” concept unconstitutionally vague as applied, creating concerns about subjective enforcement and viewpoint bias.
- In later litigation, the IRS applied a “methodology test” to assess whether advocacy substantially assists learning, and that approach was upheld as reducing vagueness.
- Rev. Proc. 86-43, effective November 17, 1986, formally publishes the IRS criteria (the methodology test) used when the educational character of advocacy organizations is in question, stating it reflects existing IRS practice.

## Issues

1. Under what criteria will the IRS determine whether an organization’s advocacy of a particular viewpoint constitutes “educational” activity for § 501(c)(3) purposes?
2. How can the IRS apply an objective, method-focused standard that avoids viewpoint-based determinations and reduces vagueness concerns?

## Decision

- The IRS announced that advocacy may be educational even if the viewpoint is unpopular or not generally accepted.
- The IRS will evaluate “educational” character based on the organization’s method of presenting its viewpoint, not on the viewpoint itself.
- The IRS adopted and published a methodology test identifying factors that indicate a non-educational method of advocacy.
- The IRS recognized that exceptional circumstances may allow advocacy to be educational even if one or more negative factors are present.
- The IRS stated that publishing the test represented no change from prior administrative practice.

## Legal Principles

- For § 501(c)(3) purposes, advocacy may qualify as educational if the method of presentation is consistent with instruction of the public and facilitates learning.
- Indicators that advocacy is not educational include:
  - A significant portion of communications consists of assertions unsupported by facts.
  - Purported supporting facts are distorted.
  - Presentations substantially use inflammatory and disparaging terms or rest conclusions primarily on strong emotional feelings rather than objective evaluation.
  - The approach is not aimed at developing audience understanding because it fails to consider the audience’s background or training.
- The IRS may consider context and apply an exceptional-circumstances allowance where overall communications still function as education despite one or more adverse indicators.
- The IRS’s stated administrative aim is disinterested neutrality toward beliefs, using a method-based standard to limit subjective, viewpoint-based enforcement.

## Conclusion

Rev. Proc. 86-43 establishes the IRS’s methodology test for assessing whether advocacy by a § 501(c)(3) applicant is “educational,” focusing on factual support, accuracy, reasoned presentation, and audience-oriented instruction rather than agreement with the organization’s viewpoint, while allowing limited context-based exceptions.


Rev. Proc. 86-43, 1986-2 C.B. 729 (1986)