NONBELIEF RELIEF, INC. v. KAUTTER
1:18-cv-02347
D.D.C.Jan 10, 2020Background:
- NonBelief Relief, a nonprofit founded in 2015 as a 501(c)(3), refused to file Form 990 for three consecutive years to protest the statutory church exemption from that filing requirement, resulting in automatic revocation of its tax-exempt status in 2018.
- It sued the IRS Commissioner asserting (a) the church exemption (26 U.S.C. § 6033(a)(3)) violates the Establishment Clause (and in the amended attempt, the Due Process/Equal Protection component) and (b) the IRS’s revocation of its own tax-exempt status violated the Establishment and Due Process Clauses; it sought declarations, injunctions, and reinstatement of its status.
- The New Macedonia Baptist Church intervened to defend the exemption and argued the exemption is constitutionally required; the Commissioner moved to dismiss for lack of jurisdiction and for lack of standing; NonBelief Relief moved to amend its complaint to drop its reinstatement request but otherwise preserve its church-exemption challenge.
- The court treated jurisdictional and standing defenses under Rule 12(b)(1) and applied settled rules on the Anti‑Injunction Act and redressability for prospective relief.
- The Court dismissed claims seeking reinstatement/declaratory relief about NonBelief Relief’s own tax status as barred by the Anti‑Injunction Act and Declaratory Judgment Act, and dismissed the separate facial challenge to the church exemption for lack of standing because NonBelief Relief had no ongoing or imminent injury that prospective relief would redress.
- The court denied leave to amend as futile because the proposed amended complaint contained only claims the court lacked jurisdiction to grant or for which the plaintiff lacked standing.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court may adjudicate claims seeking reinstatement or declaratory relief as to NonBelief Relief’s revoked 501(c)(3) status | The revocation violated the Establishment and Due Process Clauses and the court may declare and restore its status | The Anti‑Injunction Act and tax limitation of the Declaratory Judgment Act bar pre‑collection suits seeking to restrain tax assessment or restore tax‑exempt status | Dismissed for lack of jurisdiction under the Anti‑Injunction Act and Declaratory Judgment Act |
| Whether NonBelief Relief has standing to seek prospective relief (declaration/injunction) invalidating the church exemption | The church exemption injures NonBelief Relief by exempting churches from Form 990 filing; invalidating the exemption would redress that injury | NonBelief Relief is no longer a tax‑exempt organization, has no intent to reapply, and thus suffers no ongoing or imminent injury that prospective relief would redress | No standing; claims challenging the church exemption dismissed for lack of redressability |
| Whether the proposed amended complaint cures jurisdictional/standing defects | Amended complaint drops reinstatement request and keeps church‑exemption challenge, asserting the unequal treatment is ongoing | Defendants argue amendment is futile because the remaining claims still lack redressability and are jurisdictionally barred | Motion to amend denied as futile; amended complaint would not survive dismissal |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts have limited jurisdiction)
- Alexander v. Americans United, Inc., 416 U.S. 752 (1974) (Anti‑Injunction Act bars suits seeking reinstatement of tax‑exempt status)
- Bob Jones Univ. v. Simon, 416 U.S. 725 (1974) (constitutional claims do not avoid Anti‑Injunction Act bar to tax litigation)
- Enochs v. Williams Packing & Navigation Co., 370 U.S. 1 (1962) (purpose of Anti‑Injunction Act to permit tax collection before judicial intervention)
- Fla. Bankers Ass’n v. U.S. Dep’t of Treasury, 799 F.3d 1065 (D.C. Cir. 2015) (Anti‑Injunction Act and tax limitation in Declaratory Judgment Act are coterminous)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires injury, causation, redressability)
- Los Angeles v. Lyons, 461 U.S. 95 (1983) (prospective relief requires ongoing or imminent injury)
- Hettinga v. United States, 677 F.3d 471 (D.C. Cir. 2012) (court may deny leave to amend as futile if proposed claim would not survive dismissal)