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Vague laws are not tolerated for a number of reasons. First, the vagueness doctrine incorporates the idea of notice-informing those subject to the law of its meaning. A law must therefore be struck down if men of common intelligence must necessarily guess at its meaning.
Plaintiff nonprofit organization, whose purpose was to create a channel of communication for women that educated and informed them on general issues of concern to them, had a heavy reliance on charitable contributions and applied for tax-exempt status as a charitable and educational institution. The Internal Revenue Service (IRS) denied the application. The district court upheld that denial and granted summary judgment to the government. Plaintiff challenged the decision. Specifically, plaintiff questioned the finding that it was not entitled to tax exemption as an educational or charitable organization under section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3) (1976), and Treas.Reg. § 1.501(c)(3)-1(d) (2) & (3) (1959). Plaintiff also challenged the constitutionality of the regulatory scheme, arguing that it violated the First Amendment and the equal protection component of the Fifth Amendment and that it unconstitutionally conditioned tax-exempt status on the waiver of constitutional rights.
Did the district court err in upholding the IRS’ decision which denied plaintiff’s application for tax-exempt status?
On appeal, the court reversed and remanded. The definition contained in Treas. Reg. § 1.501(c)(3)-1(d)(3) lacked sufficient specificity to pass constitutional muster. Its "full and fair exposition" standard, on which the denial of the tax-exempt status was upheld by the district court, was vague both in describing who was subject to that test and in articulating its substantive requirements. The district court's decision was based on the value-laden conclusion that the organization was too doctrinaire. IRS officials earlier advised the organization that an exemption could be approved only if it agreed to abstain from advocating homosexuality as a mere preference. Clearly, there was an inherent susceptibility to discriminatory enforcement of vague statutory language.