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URL:  http://boards.fool.com/thats-wrong-they-didnt-even-need-to-apply-for-30689415.aspx

Subject:  Re: Lamest scheme ever Date:  5/17/2013  3:46 PM
Author:  albaby1 Number:  1878062 of 1957255

That's wrong. They didn't even need to apply for 501(c)(4) status to be tax-exempt. If they refrained from activities while awaiting an IRS determination, that's their fault for being ignorant of the rules.

I'm not sure I understand this argument. You don't need to be confirmed by the IRS as a 501(c)(4) to qualify for the tax exemption; but the reason why you are allowed to apply for that status is so that you (and others) can confirm ahead of time that you qualify. If the IRS fails to approve your application, and instead starts questioning whether you qualify for the tax exemption (wrongfully, but all accounts) - while other groups are quickly granted that determination - then a reasonable person would infer that the IRS has some concerns about whether your activites would qualify for exemption.

The "lawful participation" you're referring to is political activity, the very thing that calls into question their eligibility for 501(c)(4) status in the first place. And again, you don't need that status to lawfully participate or even to operate as a tax-exempt political organization.

Political activity does not call into question their eligibility for 501(c)(4) status. Mayors Against Illegal Guns is a 501(c)(4). The Health Care for America Now (HCAN) organization is a 501(c)(4). These are intensely political bodies. Political activity is a 'social welfare' function as long as it is not direct advocacy for the election of a particular candidate. And unlike (c)(3) organizations, (c)(4) organizations are allowed to do some direct election campaigning as well, as long as it is not their primary activity.

They didn't need 501(c)(4) status to operate so how could any delay in receiving it impinge on their ability to operate or participate in the election, which on it's face suggests they weren't eligible to begin with?

Once more, with feeling - 501(c)(4) groups are allowed to engage in political activity. They are allowed to participate in a whole range of political discourse, lobbying, issue advocacy, and other measures. Unlike 501(c)(3) corporations, they are allowed to engage in direct election activity, as long as it is not their primary activity.

The IRS improperly delayed confirming that they were eligible for tax-exempt status under 501(c)(4), while numerous non-conservative groups were free to engage in activities without having such uncertainty. That was harmful and unfair to these groups.

Albaby
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