Thursday, April 25, 2024

Tax-Exempt Organizations and Antisemitism

Naturally, Darryll beat me to the punch. Yesterday, he blogged about a letter from the Ways and Means Committee to the IRS asking primarily about tax-exempt organizations with ties to the Chinese Communist Party.

But then, in the middle, as Darryll notes, there's a strange diversion into questions of antisemitism and tax-exempt organizations. In one paragraph in the middle of the letter, the House writes,

Such connections to suspicious activity involving tax-exempt organizations and propaganda do not end there. The People’s Forum, another 501(c)(3) organization funded by Mr. Singham, was recently at the center of a series of massive antisemitic events in the wake of the Hamas attacks on October 7, 2023.12 These events, which featured protestors brandishing antisemitic images13 and antisemitic chants like, “from the river to the sea, Palestine will be free,”14 were only a few in a series of hateful, propaganda fueled events supported by The People’s Forum. In a hearing before the Ways and Means Committee titled, From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt  Universities, and Terror Financing, one witness, Noa Tishby, explained the meaning of the slogan popular among demonstrators: “[w]hen people say, ‘from the river to the sea, Palestine will be free,’ they mean…ethnically cleansing the Jews from their ancestral land.”15 Even worse, in January 2024, Executive Director of The People’s Forum, Manolo De Los Santos, refused to apologize for comments that some labeled as “Nazi rhetoric.”

Apparently in reference to this paragraph, the letter asks the IRS, "Does the IRS have a definition of antisemitism in place within the agency that it considers when evaluating the claimed exempt purpose of a tax-exempt organization?"

This line of inquiry is a difficult one; it's easy to decry this as political theater (because, in large part, it is political theater). But this echoes the outrage from a handful of years ago, when the AP reported that a number of white nationalist groups were exempt from tax (albeit with the outrage coming from the other political direction). 

If the Ways and Means Committee is correct that tax-exempt organizations are funding antisemitic activities, that's bad. Just like tax-exempt organizations promoting racist and white nationalist ideas is bad. 

But the IRS determining whether an organization qualifies for tax-exempt status on the basis of its ideology is tremendously bad. It violates the Constitution by imposing viewpoint restrictions and, frankly, even if it didn't, it should be anathema to those on the left and the right. We don't know who will be the next president, much less the president after that. While that person may agree with my views, they may hold views deeply repugnant to me.

That's not to say that the IRS should take an entirely hands-off approach. While it can't deny tax-exempt status for ideological purposes, frankly, it's tremendously easy to slot an organization into the role of exempt educational organization. The IRS should police its granting of tax exemption more closely; it shouldn't let organizations that claim to be educational, but in fact aren't, have a tax exemption.

But it is also critical that it reject that Ways and Means Committee's push toward establishing ideological standards for tax-exempt organizations.

Samuel D. Brunson

https://lawprofessors.typepad.com/nonprofit/2024/04/tax-exempt-organizations-and-antisemitism.html

Federal – Legislative, In the News | Permalink

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