Effects of the Big Mama Rag Decision on Exempt Education Organizations: An Analysis

The only exempt organization issue on the Service's "prime issue" list is "whether an organization using the mass media to disseminate its views on controversial political and social issues is exempt as an educational organization under Section 501(c)(3) in the absence of a 'sufficiently full and fair exposition of the pertinent facts' that permit the public to form an independent opinion." The first major test of the "full-and-fair-exposition" standard was in Big Mama Rag, Inc., CA-D.C., 9/15/80, rev'g and rem'g 484 F. Supp. 473 (DC D.C., 1979) ("BMR",) involving a feminist organization that had been denied exempt status as an educational organization by the IRS. The IRS had determined that BMR's monthly newspaper was not education in either its content or presentation and that BMR's distribution of the newspaper was commercial in nature. In a declaratory judgement action filed under Section 7428, the district court upheld the IRS determination, finding that the full-and-fair exposition standard is valid on its face and was properly applied to BMR.