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Subject:  Re: It's pretty simple Date:  5/17/2013  2:30 PM
Author:  xLife Number:  119153 of 164876

Getting the equivalent of a proctological exam by the IRS because your politics don't agree with the administration isn't harm?

Funny image. Turns out the tea baggers voluntarily asked for the rectal exam. Political groups don't need to apply for 501c4 status. They just have to file a FORM 1112-POL with their tax return. "Please, Sir, may I have another."

Generally, a political organization is treated as an organization exempt from tax. Certain political organizations, however, must file an annual income tax return, Form 1120-POL, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527.

Everyone should read the IRS rules governing 501c4 status before ignorantly spouting off on this matter.

To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted only to charitable, educational, or recreational purposes.

Almost all tea party groups are explicitly political, not chartible, educational or recreational in purpose.

There is some exception for social welfare groups that dabble in political activity, but you have to provide additional information to qualify:

...if you submit proof that your organization is organized exclusively to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office.

This is what the proctologists at the IRS were looking for, some proof that these tea party groups are organized exclusively to promote social welfare. In fact, the tea party doesn't engage in "some political activity." Political activity is its primary purpose. It's a political movement, fer chrissakes. The Tea Party Movement's homepage is calling for Obama's impeachment today. Back then, it was actively promoting candidates to oppose Democrats and unworthy Republicans. If that's not political, what is?

That's more than enough basis for a lawsuit, plus groups can show financial losses from the delay in getting their non-profit status approved.

What losses? Donations to 501c4s aren't tax deductible so they can't claim lost revenue. None of these groups had to pay taxes themselves anyway, so no damage there. They could claim expenses related to the collection and delivery of information the IRS asked for, but the IRS is supposed to ask for that information. The problem here wasn't that they asked tea party groups for additional information. It's that tea party groups were flagged because they had "tea party" in their name. (Which kind of makes sense, since it signals political activity.)

This is like appealing a speeding ticket because only you got pulled over after flashing a finger at the cops even though other cars might have been speeding too. Actually, it's more like suing the police for damages because you were late for work even though they voided the ticket and apologized for the inconvenience.

The IRS is going to have to pony up a pretty penny when all is said and done.

You mean the U.S. taxpayer will have to pony up. Wouldn't that be ironic.
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