Galston, Hate Groups and the Charitable Tax Exemption
This article wrestles with the issues raised by tax-exempt hate groups by analyzing federal tax law, public policy both internal and external to tax law, and constitutional jurisprudence, particularly as it bears on freedom of speech and association and on viewpoint discrimination. These sources exhibit competing visions of the role that groups animated by unconventional, and even repugnant ideas play in civil society. The article concludes that, although the outcome is uncertain, these sources favor permitting the subset of hate groups operating like think tanks and other educational entities to have tax exemption as educational section 501(c)(3) organizations because of the First Amendment and the commitment to pluralism underlying the nonprofit sector. In addition, the practical difficulties of requiring the IRS to identify which organizations should be labeled hate groups when experts cannot agree on the scope of this classification reinforce the conclusion reached based upon legal doctrines and public policy constraints that favor allowing such groups to qualify as exempt.
Lloyd Mayer