Freedom Path on the Move: Constitutional Free Speech Challenge to IRS "Facts and Circumstances" Test
The election year may be over, but free speech issues affecting politics and nonprofits remain of prime importance. The case of Freedom Path, Inc. v. Lois Lerner, et al. presents the question of whether the IRS’s “facts and circumstances” test for tax-exempt organizations’ advocacy speech is constitutional. The case could impact both free speech legal principles and the IRS’s future handling of nonprofits’ tax-exempt qualifications and activities.
Freedom Path is a Section 501(c)(4) social welfare organization that engages in “issue advocacy” – that is, communications intended to educate people about a wide variety of public policy issues. Some section 501(c)(3) organizations also engage in issue advocacy activities, addressing public policy issues as part of their mission. For both types of tax-exempt organizations, questions of legal permissibility may arise when these communications take on a political hue.