News & Insights

Changes in the Law and Extended Deadlines

Inside this Edition:

ELECTIONS UPDATE

• Additional States Postpone Congressional Primary Elections; Reporting Deadlines Adjusted

FEC UPDATE

•  DC District Court Enters Default Judgment Against the FEC in CREW, et al. v. FEC

IRS UPDATE

• IRS Extends More Tax Deadlines, Including Form 990-series Returns and Notices
• IRS Suspends Certain Operations Affecting Tax Exempt Entities During COVID-19

TEXT MESSAGING

• Update: Supreme Court to Hold Oral Argument in May Via Teleconference for Potentially Key Decision for Text Messaging Campaigns

ELECTIONS UPDATE

Additional States Postpone Congressional Primary Elections; Reporting Deadlines Adjusted

Additional states have rescheduled their Congressional primary elections since our last update. Maine, Virginia, and New Jersey are the latest states to announce rescheduled primaries. Further, Georgia, which had previously rescheduled its presidential preference primary, is now rescheduling its congressional primary and its presidential preference primary (a second time) to June 9.

The FEC continues to adjust the dates and deadlines for pre-election reports, electioneering communications, and 48-Hour Notices as Congressional primary elections get postponed. Below is an updated list of new reporting deadlines for Congressional pre-primary reports and the related electioneering communications windows for the rescheduled elections.  The 48-Hour Notices window for candidates in each state can be found here.

We continue to monitor developments in each state to keep you apprised of any additional changes.

FEC UPDATE

DC District Court Enters Default Judgment Against the FEC in CREW, et al. v. FEC

In recent years, interest groups that favor greater regulation of political speech have pursued an aggressive litigation strategy to force the FEC to enforce the law in the manner they see fit.  These groups are taking advantage of the FEC’s current lack of a quorum of four Commissioners which leaves the agency unable to take most actions, including authorizing agency counsel to respond to lawsuits to further advance their strategy.  Last week, a first-of-its-kind default judgment was entered against the FEC after it failed to respond to a lawsuit filed by Citizens for Responsibility and Ethics in Washington (“CREW”).

CREW filed complaints with the FEC between June and November 2018 alleging that several organizations violated the Federal Election Campaign Act (“FECA”) by routing money to a Super PAC while concealing the identity of the original donors.  Because the FEC’s enforcement process is confidential until matters are closed, the status of the case is unknown.  Shortly after the FEC lost its quorum in September 2019, CREW filed a lawsuit that invoked a FECA provision allowing complainants to bring suit if the FEC fails to act within 120 days.  FEC Chair Caroline Hunter issued a sharply worded statement criticizing CREW for its timing in suing the agency.

With the FEC unable to respond to CREW’s lawsuit, on April 9, the U.S. District Court for the District of Columbia entered a default judgment against the FEC, ordering the FEC to conform to the court’s declaration within 90 days.

As a result, the agency finds itself in uncharted waters.  If the FEC remains unable to respond in 90 days, the court could authorize CREW to sue the targets of its complaints directly and ask the court, rather than the FEC, to decide the case.  Another possibility is the Department of Justice stepping in to represent the FEC in court.  We will continue to monitor these developments.

IRS UPDATE

IRS Extends More Tax Deadlines, Including Form 990-series Returns and Notices

The IRS has announced in Notice 2020-23 that the extensions it previously granted now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. This includes all Form 990-series annual information returns or notices (Forms 990, 990-EZ, 990-PF, 990-BL, 990-N (e-postcard)).  As stated in the notice, an organization can obtain an additional extension by filing the requisite form (Form 8868 for the 990 return) by July 15, 2020, but “the extension date may not go beyond the original statutory or regulatory extension date” (to November 16, 2020, for the Form 990 for calendar year organizations).

IRS Suspends Certain Operations Affecting Tax Exempt Entities During COVID-19

In response to the coronavirus (COVID-19) crisis, the IRS is continuing with mission-critical activities for the nation but is limiting some operations. In its most recent exempt organization newsletter, the IRS explained that the following services related to Tax Exempt and Government Entities are suspended until further notice:

• Telephone customer accounts services
• Some updates to Tax Exempt Organization Search

The IRS strongly urged taxpayers applying for recognition of exempt status under IRC Section 501(c)(3) to use the electronically-submitted Form 1023 or, if eligible, the Form 1023-EZ.

TEXT MESSAGING

Update: Supreme Court to Hold Oral Argument in May Via Teleconference for Potentially Key Decision for Text Messaging Campaigns

Last week, we updated you about an upcoming Supreme Court case that may have significant implications for text messaging by political campaigns and grassroots advocacy groups. In particular, the Court could determine the crucial legal issue of what constitutes an automated telephone dialer system (ATDS) and what degree of human intervention makes a system non-automated.  Last week, the Supreme Court announced that it will hold oral argument next month via teleconference in that case, Barr, et al. v. American Association of Political Consultants, et al. The Court previously postponed oral argument in the case in response to COVID-19.  The case is one of only thirteen cases that the Court selected to move forward with in May via teleconference. The Court set six days aside for these oral arguments and the oral argument in Barr will be held on Wednesday, May 6. The Court will make live audio of the argument available to the public. The Court's press release can be read here.

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