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Subject:  Re: Lamest scheme ever Date:  5/17/2013  4:13 PM
Author:  albaby1 Number:  1878073 of 2207642

Yes, but that's irrelevant to my argument. Social welfare organizations need 501(c)(4) status to be tax exempt. But these groups in question are primarily political organizations. Political organizations don't need 501(c)(4) status for tax exemption. They just have to file a form (Form 1112-POL) with their return. So the filings for 501(c)(3) were entirely unnecessary.

It's sort of like applying for a license to open a lemonade stand even when you don't need one, then complaining that your application is being delayed while the town clerk tries to figure out what to do with you.

But this is factually untrue. As noted repeatedly in this thread, all of these organizations were eventually granted their 501(c)(4) status. All of them properly filed for a designation that they qualified for.

And again, what uncertainty? The groups were eligible for non-profit status with or without 501(c)(4) approval? Approval or rejection made no difference to their ability to operate.

Of course it would have affected their ability to operate. Once you've asked the IRS, "Am I tax-exempt?", if they don't say "yes" you need to act more circumspectly in any activities where tax exemption matters to you.

In my practice, for example, I will (from time to time) seek written confirmation from local governments that a client falls within a statutory exemption. I'm not required to do that, of course - but obtaining a written confirmation provides the client assurance that they qualify for the exemption, rather than running the risk that the agency might interpret the exemption differently than we do. If the agency comes back with a response that is, essentially, "we're not sure yet" then the client cannot move forward under the assumption that he qualifies for the exemption - the agency has already made a de facto determination that things are uncertain.

There are consequences to assuming you're tax exempt when you're not. You have to change your behaviors if there is uncertainty as to your status.


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