Branch Ministries, Inc. v. Rossotti

Four days before the 1992 presidential election, Branch Ministries, Inc. (Branch) (plaintiff) took out full-page advertisements in the Washington Times and USA Today warning Christians not to vote for Bill Clinton. In fine print, Branch solicited tax-deductible donations toward the cost of the advertisements. A few weeks later, the regional commissioner of internal revenue, Charles Rossotti (commissioner) (defendant) notified Branch that the Internal Revenue Service (IRS) would conduct an inquiry to determine whether Branch would be allowed to retain its exemption from income taxation under § 501(c)(3) of the Internal Revenue Code. In January 1995, the IRS revoked Branch’s tax-exempt status. Branch challenged the decision in federal district court, arguing selective prosecution and that the IRS lacked authority to revoke Branch’s tax-exempt status unless it first determined that Branch was not a bona fide church. The commissioner did not dispute that Branch was a bona fide church but argued that Branch lost its eligibility for the exemption by participating in partisan political activity. The commissioner also denied that the IRS had selectively prosecuted Branch. Branch offered evidence of preachers who made political pronouncements from the pulpit, but he did not identify any other church that retained its tax-exempt status after running political advertisements in national newspapers. Branch and the commissioner filed cross-motions for summary judgment.