Letter to the Internal Revenue Service

INDEPENDENT SECTOR Urges IRS Impartiality in Responding to Audit Requests

March 7, 2001

The Honorable Charles O. Rossotti
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224

Dear Commissioner Rossotti:

I am writing to you on behalf of INDEPENDENT SECTOR, a nonprofit, nonpartisan coalition of more than 700 national nonprofit organizations, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation. Our mission is to promote, strengthen, and advance the nonprofit and philanthropic community to foster private initiative for the public good.

INDEPENDENT SECTOR strongly believes that the community has a responsibility to advance ideas and points of view, including controversial ones, as a key component of the Constitutional guarantees of freedom of speech and of assembly. It is in this regard that I write you. Recent media reports have suggested that it was inappropriate for charities to engage in lobbying with regard to the nomination of John Ashcroft as attorney general. There are indications that formal complaints have been lodged with the Internal Revenue Service. Without defending or opposing the Ashcroft lobbying, I offer the following observations. 

It is likely that the coming months will find the Congress engaged in important policy debates that will have significant and lasting impact on the nation. We can expect that charities representing a broad range of perspectives will have important contributions to make to those debates. Regardless of philosophy or point of view, it is incumbent upon legislators to carefully consider proposals and fully understand the ramifications. This only occurs if there is an informed citizenry and interested parties are allowed to speak. 

Congress has long recognized that charities have an important role in that process and has structured the Internal Revenue Code to permit them to engage in educational discourse and lobbying activity, within permissible guidelines. Indeed, charities that make an election to be governed by the standards of section 4911 of the Internal Revenue Code are able to expend significant funds on precisely the sort of lobbying activity questioned in the media reports. In addition to Congressional approval, the U.S. Supreme Court has stated that “it is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech.” NAACP v. Alabama (1958).

The Internal Revenue Service has an extraordinarily difficult task in ensuring the fair and impartial administration of the federal tax laws. In recent years, the agency has weathered charges of bias for strict adherence to standards of nonpartisanship. INDEPENDENT SECTOR appreciates that commitment. We are confident that the agency will continue on the same path in the future, enforcing the tax laws consistently and fairly without regard for political affiliation or pressure. 

In addition, we assume that the act of lobbying, even, or particularly, on controversial issues that receive extensive media coverage, will not, in and of itself, be cause for any increased IRS scrutiny of these organizations. It is worth noting that some of the media coverage perpetuates the myth that 501(c)(3) public charities are prohibited by law from lobbying. We appreciate the efforts of the IRS to dispel that myth. We look forward to continuing to work with you in the fair, impartial, nonpartisan application of the tax laws that are so important to the overall health of and public confidence in the charitable sector.

Sincerely,



Sara E. Meléndez
President and Chief Executive Officer