Texas Appeals Court Upholds IRS Test For Nonprofit Status

By Christopher Crosby (July 7, 2017, 8:39 PM EDT) -- A Texas federal judge on Friday upheld an Internal Revenue Service rule used to deny tax-exempt nonprofit status to a conservative group, saying the rule is not "unconstitutionally vague" and does not restrict free speech.

In denying Freedom Path Inc.'s motion for summary judgement, U.S. District Judge Sidney A. Fitzwater said the "facts and circumstances" test the IRS used to determine that the conservative group's activities constituted political campaign intervention isn't overbroad and therefore not unconstitutional on its face, according to Friday's ruling.

The IRS rule, which is used determine whether a group otherwise exempt from federal income tax has spent...

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