Posted 6 months ago on June 13, 2013, 6:55 p.m. EST by GirlFriday
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Beyond the First Amendment issues, legal experts who have reviewed the lawsuits think they have a limited chance of success, largely because the courts have very narrow authority to do what lawyers like Sekulow are asking them to do—that is, to award damages for alleged constitutional violations or order the IRS to recognize their nonprofit status.
Matthew Journy and Jeff Tenenbaum, tax lawyers at the DC firm Venable, analyzed Sekulow's complaint and concluded that the court is likely to dismiss 23 of the 25 plaintiffs straight away. Here's why: In one part of his case, Sekulow is suing under a section of the Internal Revenue code that allows a nonprofit to ask a judge to order the Treasury Department to recognize its nonprofit status if the IRS has either refused to do so or improperly delayed a determination. But that part of the code applies only to nonprofits seeking 501(c)(3) status, a tax-exempt designation that has tight restrictions on political activity and that allows donors to deduct their contributions from their taxes. Only 2 of the 25 plaintiffs in the case sought such a designation. The rest applied for 501(c)(4) status, which allows limited political activity but not tax-deductible contributions. These nonprofit entities are not covered by the statute Sekulow is suing under. Even if they were, 13 of the plaintiffs have already won the only real remedy available under that particular provision: tax-exempt status. (Sekulow didn't return a call for comment.)
The remaining two plaintiffs who might be allowed to proceed with legal action will still face major hurdles, particularly because their complaint, as it's currently written, isn't specific enough to meet the high bar the court requires, according to Journy and Tenenbaum.
All of the pending suits are asking a court to award punitive damages—even though the law of sovereign immunity expressly prevents the award of such damages against the government in most cases. In tax-exempt cases, punitive damages are only available under very limited circumstances that may not apply to many of the tea party plaintiffs.
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