Amicus Brief: Buckeye Institute v. IRS

The First Amendment rights to free speech and association are foundational to American freedom. Cases from the McCarthy and Civil Rights eras made it clear that compelled disclosure of speakers’ associations must survive exacting scrutiny. Just four years ago, in Americans for Prosperity Foundation v. Bonta, the Supreme Court applied this standard and held that California’s request for donor information violates the First Amendment because the state failed to show a compelling reason for that request.

The compelled disclosure of nonprofit-donor information to the IRS, through a federal tax form known as Schedule B, similarly infringes on these rights, so the Ohio-based Buckeye Institute sued to block that disclosure and moved for summary judgment. MI joined 70 organizations on a brief supporting that lawsuit. We argued that, despite its protestations, the IRS failed to demonstrate any need for the compelled up-front disclosure of Schedule B’s donor information to further its interest in revenue collection. Because the compelled disclosure is both under- and overinclusive in furthering any such interest, and cannot be justified based on administrative convenience, it fails exacting scrutiny. And just as California failed to ensure the confidentiality of donor information, the IRS’s history of mishandling confidential taxpayer information threatens to chill the speech and association rights of 501(c)(3) organizations and their donors.

The IRS filed a motion to dismiss, arguing that Buckeye lacks standing and that, rather than applying “exacting scrutiny”—under which the government would almost certainly lose—the court should resolve the case under a “reasonableness” standard. The district court denied that motion, and the parties’ cross-motions for summary judgment, instead certifying its decision for an appeal to the Sixth Circuit primarily to resolve what standard applies, reasonableness or exacting scrutiny. Now before the appellate court, MI has joined Philanthropy Roundtable, People United for Privacy Foundation, and Kansas Justice Institute on a brief arguing that: (1) to chill First Amendment rights is to violate them; (2) the need for exacting scrutiny is a hard lesson learned from the NAACP line of associational liberty cases; and (3) exacting scrutiny is the standard in compelled-disclosure cases. This debate over the proper level of judicial scrutiny may seem abstruse, but it has significant implications not just for donor privacy, but also for the scope of the “unconstitutional conditions” doctrine, which says that government can’t condition the exercise of one right on the denial of another.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.

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