Up on SSRN and forthcoming in Northwestern Law Review, Brian Galle (Florida State, visiting at Georgetown) has a new paper on the tax law implications of the participation by the Mormon church in the campaign against Prop 8. Galle's essay raises interesting questions,including the issue of how such things as the church's phone-tree and e/mail lists should be valued in determining whether it spent "substantial" resources on lobbying activities. The litmus test under federal tax law for the permissible amount of lobbying by a tax exempt charitable organization is whether the lobbying constituted a "substantial" part of the charity's activities.
Galle argues that Prop 8 "exposes a serious hole in the fabric of federal law: the possibility that massive million dollar lobbying expenditures, large enough to swamp any opposition, may be perfectly legitimate so long as they are undertaken by a sufficiently gigantic organization." The law is unclear enough that there is no clear basis for concluding that the Mormon church was in violation for its Prop 8 activities, but Galle argues that those activities are problematic in light of the purposes behind the exemption for charities.