Equitable claims in tax-exempt application | KPMG | US
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D.C. Circuit: Equitable claims in tax-exempt application cases vacated, remanded

Equitable claims in tax-exempt application

The U.S. Court of Appeals for the District of Columbia today issued a decision that vacates and remands for further proceedings, actions filed by entities that had filed applications for recognition of tax-exempt status as charitable or educational organizations but were subject to enhanced review by the IRS.


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The cases are: True the Vote, Inc. v. IRS, No. 14-5316 (D.C. Cir. August 5, 2016) and Linchpins of Liberty v. United States, No. 15-5013 (D.C. Cir. August 5, 2016).  Read the D.C. Circuit’s decision [PDF 54 KB]


The appellants were applicants whose applications for tax-exempt status were selected by the IRS “for more rigorous review on the basis of their names.” The appellants brought the present actions against the IRS and several of its individual employees, seeking: (1) money damages by way of relief under a Bivens action; (2) statutory claims for unauthorized inspection or disclosure of tax return information; and (3) equitable relief by way of injunction and declaratory judgment. The federal district court held the Bivens action would not lie against the individual defendants or the IRS. The district court also dismissed the statutory claims and dismissed the equitable claims as moot.

The D.C. Circuit today affirmed the district court’s decision as to the Bivens actions and statutory claims, but held that the equitable actions were not moot. The appeals court thus vacated and remanded the equitable claims for further action.

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