Project Veritas and Illegality

By Sam Brunson

Copyright: Creative Commons Attribution-ShareAlike 2.0 Generic

On November 5—two days after the presidential election—James O’Keefe posted an interview with a postal worker claiming that he and his colleagues were instructed to backdate ballots that they received after election day. The next day he filed an affidavit swearing that he and his colleagues had been instructed to continue picking up ballots after the November 3 deadline.

After an interview with U.S. Postal Service investigators, Richard Hopkins, the postal worker, recanted his statements. He also told investigators that his affidavit had been written by Project Veritas, the organization O’Keefe founded and with which he is associated.

Project Veritas, it turns out, is a tax-exemption organization. And its association with Hopkins may have put its exemption at risk. By signing an untrue affidavit, Hopkins almost certainly broke the law. And several attorneys interview in the Salon story say that Project Veritas may also have broken the law as a result of its involvement in the false affidavit.

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The IRS Did Not Violate the First Amendment in Declining to Exempt Organizations to Help Marijuana Dealers

By Ellen P. Aprill

Several commentators have called attention to the statement of the IRS in Revenue Procedure 2018-5, just reiterated in Rev. Proc. 2019-1, that it will not issue a determination letter recognizing exemption from income tax for “an organization whose purpose is directed to the improvement of business conditions of one or more lines of business relating to an activity involving controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law regardless of its legality under the law of the state in which such activity is conducted.”

These commentators suggest that this position could constitute impermissible viewpoint discrimination in violation of the First Amendment. I do not view the IRS announcement in this way. Instead, I see it as an application of the long-standing principle denying exemption to entities with an illegal purpose or engage primarily in illegal activities.

The illegality doctrine has long prevented exemption under section 501(c)(3), the category that encompasses what we generally call charities. In the words of Section 101(c) of the ALI Draft Restatement of the Law of Charitable Nonprofit Organizations, “[a] purpose is not charitable if it is not lawful, its performance requires the commission of criminal or tortious activity, or it is otherwise contrary to fundamental public policy.” Continue reading “The IRS Did Not Violate the First Amendment in Declining to Exempt Organizations to Help Marijuana Dealers” →

Dog Owners of Tribeca

My favorite news story from last week: it turns out that ten years ago, a group of dog owners in Tribeca installed a lock on a public New York City dog park, and started charging people a membership fee—$120 a year—if they wanted to use the (public!) park. They created a list of rules, most of which focused on keeping others out, and, if you violated the rules, you were kicked out, and apparently had to let your dog play with other proletariat dogs. (N.b.: this state of affairs lasted ten years, until the city finally cut the lock and reopened the park to the public.)

This story has everything: self-absorbed and self-righteous New Yorkers; a funny thing I read on Twitter while sitting in church Sunday; a bit on this week’s Wait Wait Don’t Tell Me. And, perhaps more importantly, a tax angle. See, these snooty, selfish New Yorkers did something more than hijack a public space—they formed a tax-exempt organization to manage it. Continue reading “Dog Owners of Tribeca” →