Key Arizona Tea Party groups say IRS did not give them additional review

[bemildred]

Source: Capitol Media Services

---

Several groups contacted Friday said they had not had their books audited. But the reason may be simple: The IRS was looking at organizations incorporated as a 501(c)(4), a particular type of nonprofit.

Trent Humphries, former president of the Tucson Tea Party, said his group took specific action to avoid such a review.

"We were warned by other groups that if you try to do type of 501 (c)(4) or anything like that, yeah, they're going to come after you, and hard,'' he said. Humphries, a co-founder of the organization, was a conscious choice not to seek that status.

Traditional charities, organized under section 501(c)(3) of the Internal Revenue Code cannot get involved at all in politics.

Read more: http://www.eastvalleytribune.com/arizona/politics/article_0cdca1ca-bbe7-11e2-b70a-0019bb2963f4.html

[Seeking Serenity]

1. So many people have the absolute wrong idea of what this was about

This was not about the IRS targeting certain groups for AUDITS. It was about targeting certain groups' applications for not-for-profit 501(c)(4) status, and by picking applications for enhanced scrutiny, not based on some random sample or mathematical formula, but because of certain key words, like "Tea Party," or "Patriot," in the groups' names.

[starroute]

6. You can't do random samples or mathematical formulas for these things

This is not like doing tax audits. This is about whether Group A fulfills the criteria for being a social welfare organization. So you have to look at every group that applies -- but you may have to look at some of them more closely than others.

The argument is over the basis for choosing which ones to look at more closely. If you have two groups, one called the "Angry Patriot Take Back Our Country from Them Folks What Don't Deserve It Society" and the other one called the "Help Distressed Puppies and Kitties be Adopted by Little Old Ladies Society," which one is more likely to be involved in unauthorized political activity?

It sounds as though the IRS folks may have adopted some prejudicial shortcuts at a time when lots of right-wing groups were applying for tax-exempt status -- kind of the equivalent of cops using racial profiling to decide who to single out for stop-and-frisk. But it would be equally misguided to, say, stop every 10th kid who passes by without applying common sense to your choices.

It's a delicate balance, especially at a time when the IRS is underfunded, and simply saying "they were wrong" doesn't get at the underlying problem.

[elleng]

2. Right, so IRS examined 501(c)(4) corps

AS THEY SHOULD. I think the term 'targeted' is misleading, as I suspect IRS was doing its job.

[Seeking Serenity]

3. Apparently not doing its job properly,

since the IRS apologized for what it did ahead of an Inspector General's report, due out soon as I understand it, that is reportedly going to be critical of the IRS' actions in this matter.

[elleng]

4. Yes, we'll see if 'targeted' is the correct term.

Napoleon said: Never ascribe to malice what which is adequately explained by incompetence.

[okaawhatever]

12. The headlines I read said IRS apologizes, but the only one I could find quoted was Lois Lerner

she was the woman who oversaw the approval section. She was a Bush appointee and 3 levels below the commissioner. I'm a little preturbed at the headlines. Many were saying President Obama apologized, etc. I'm hoping the irs comes back with all the fake tea party groups and those associated with white supremacy groups in it's defense.

[Seeking Serenity]

14. I don't believe Lois Lerner is a Bush appointee

I think she's civil service.

[AnnieK401]

5. I thought the groups complaining were 501 (c) 3 not 4, could be wrong.

I heard that groups with 501 C 3 status are not allowed to endorse a candidate, but are allowed to advocate for issues. In any case, I can see why a group with "Tea Party" in the name might legitimately draw a little extra scrutiny. Although apparently many other groups are getting away with crossing the line. I can see where it would be confusing, and wish the media would educate people about the confusion rather than trying to focus on a scandal.

[starroute]

8. It's a bit more complicated than that

Last edited Mon May 13, 2013, 05:14 PM - Edit history (1)

501(c)(3)'s are barred from all political activity, although they can conduct research and education on particular issues as long as they don't back specific candidates or legislation. In addition to these groups themselves being tax-exempt, donations to them are tax-deductible.

Contributions to 501(c)(4)'s are not tax-deductible, but they have a bit more latitude in their actions. They can lobby as long as that is not their primary activity and can recommend candidates to their own members (though not to the general public), but they are not allowed to coordinate their activities with a federal candidate or party.

Obviously, both categories have loopholes. A lot of very partisan activity can pass as "educational," and a lot of covert coordination takes place on a "wink and a nudge" basis, where the 501(c)(4) simply watches the candidate's political ads and reinforces their message. So the problem for the IRS is figuring out in advance which groups are likely to violate the guidelines and subjecting their applications to stricter scrutiny.

(See http://www.stealthpacs.org/about/page.cfm?pageid=7)

[AnnieK401]

10. Thank you!

[Jim Lane]

13. No, it's a bit more complicated than THAT, even.

It's not accurate to say that 501(c)(3)'s "can't back specific ... legislation." They can back specific legislation if they don't overdo it. You think that's too vague? Let the IRS enlighten you:

In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.

Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies.

An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their tax-exempt status.

That's quoted from the "Lobbying" section of the IRS's online explanation of laws relating to charities and non-profits. At the linked page you'll find further links to more detailed discussions.

[KansDem]

7. So, more GOP manufactured "poutrage"...

How I despise these people!

[AnnieK401]

9. I know, I know.

I also think the media is "enabling" them by not explaining the complex subtleties involved. Then again, when do they ever.

[John2]

11. Yeah, I'm listening to

the media pundits now, talking about President Obama should fire somebody. If they think somebody did something wrong, you don't just fire someone, you do an investigation. You let the employee defend their actions or they can sue you for wrongful termination if you don't have your facts straight. I really don't know where these pundits get off. They just as well carry water for the rightwing Republicans. If those groups were more susceptible to abuse the law, then they deserve more scrutiny. You can't do your job if you don't. I think the apology was ridiculous and the entire fuss is stupid. If there is a group that thought that were unfairly treated, it is their responsibility to make complaints. Has the IRS ever apoligized to any other group besides these conservative groups? If the IRS found any of their employees did something against Policy, isn't it the IRS's responsibility to discipline their employees instead of taking this up to Presidential level? The person that issued the apology seems to be the one making it a political issue, without taking action against the people he\she thought did something wrong. It is unfair to the employees too, they are accusing without some hearing. I thought that was the procedure when you are a Federal employee?