Service Employees International Union v. United States

KLEINFELD, Circuit Judge:

We address whether penalties on tax exempt organizations for late filing of informational returns may be reduced by district courts as a matter of discretion. We conclude that they may not be.

I. Facts.

Labor unions do not have to pay income or other federal taxes. 1 But they do have to file informational returns disclosing their income, disbursements, etc. 2 Service Employees International Union (“SEIU”) and its subsidiary 100 Oak Street Corporation (“Oak Street”, SEIU’s Oakland address) are labor organizations enjoying the tax exemption and burdened by the return…