No. of Recommendations: 40
Anyone know how many of the conservative groups in the IRS scandal had their applications rejected and were denied 501(c)(4) non-profit status?

None. As in not one.

Anyone know what this supposed effort at political intimidation consisted of? A request for additional information supporting the application. .

If this is an example of Chicago-style political hardball, I'm Al Capone.
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Anyone know how many of the conservative groups in the IRS scandal had their applications rejected and were denied 501(c)(4) non-profit status?

None. As in not one.


By the way, that's the real scandal. The Tea Party is, um, a political party. It's not a social welfare organization. It's primary purpose is not to educate the public about social issues. It is not engaged in "limited political activity." Political activity is it's entire reason for being. It's primary purpose is to get Republican candidates that meet its political criteria elected to office.

Democrats are pu$$ies.
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Anyone know how many of the conservative groups in the IRS scandal had their applications rejected and were denied 501(c)(4) non-profit status?

None. As in not one.

Anyone know what this supposed effort at political intimidation consisted of? A request for additional information supporting the application.


What they're claiming is that their applications were simply put into limbo and never approved, and that the "request for additional information" was so broad (and asked for improper information) that it was tantamount to a denial. Some were allegedly so daunted by these improper requests that they withdrew their applications. See:

http://www.washingtonpost.com/politics/groups-who-sought-tax...

Whether that gets proved out or not is an open question. But as someone who has represented private parties dealing with government bureaucracies for quite a while, I can attest to the fact that government delays can be as (or more) damaging than denials at times.

Albaby
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God I love it when you guys minimalize scandals.

I really do.

Some on the left have actually disappointed me - they have expressed outrage and even make comparisons to Watergate.

But not our PA libs! They don't disappoint! We are guaranteed to see attempts to trivialize and dismiss any scandal. Illegal activities in the IRS, big deal. Potential illegal use of phone records, its OK because we are hunting a traitor. Killing Americans without oversight - meh - they are just all brown skinned terrorists.

But hey, you might disappoint me eventually. It did take you about two weeks before you back-pedalled enough on drones to un-equivocally call that wrong too. That was a sad day.
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Killing Americans without oversight - meh - they are just all brown skinned terrorists.

Your very language betrays your blinders, and demonstrates why this one at least is no scandal at all.

Just because you call it a scandal does not make it a scandal.

I'd call it a witch hunt.
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Meh, witch hunt is not racist enough. You should go back to calling it a lynching.
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<<<Anyone know how many of the conservative groups in the IRS scandal had their applications rejected and were denied 501(c)(4) non-profit status?>>>

Anyone have any idea why this could be the issue?
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That's not the point. The mere fact that they were treated differently is a problem. I'm not a tax lawyer, but I'm assuming that until the applications were approved, these organizations could not behave as
501(c)(4) organizations and had to operate under a different set of rules until then.

It's possible that the delay in processing cost the organizaions money.

I have no sympathy for TP Groups, but I don't want the IRS making up the rules and/or changning the rules whenever they want.
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That's not the point. The mere fact that they were treated differently is a problem. I'm not a tax lawyer, but I'm assuming that until the applications were approved, these organizations could not behave as
501(c)(4) organizations and had to operate under a different set of rules until then.

It's possible that the delay in processing cost the organizaions money.


Interestingly, it appears that you can just declare yourself a 501(c)(4), file the proper return, and you are good to go:

http://www.newrepublic.com/article/113217/irs-tea-party-scan...
--------------------
It turns out that the applications the conservative groups submitted to the IRS—the ones the agency subsequently combed over, provoking nonstop howling—were unnecessary. The IRS doesn’t require so-called 501c4 organizations to apply for tax-exempt status. If anyone wants to start a social welfare group, they can just do it, then submit the corresponding tax return (form 990) at the end of the year. To be sure, the IRS certainly allows groups to apply for tax-exempt status if they want to make their status official. But the application is completely voluntary, making it a strange basis for an alleged witch hunt.
----------------------
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Though it fits well with the usual rightwing whining that Obama's to blame for everything since Hoover, that's not their primary motivation here. They're trying to get ahead of the IRS questioning their partisanship. If they can't neuter the IRS before it classifies them accurately, they're gonna die even sooner than expected.
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"But not our PA libs! They don't disappoint! We are guaranteed to see attempts to trivialize and dismiss any scandal. Illegal activities in the IRS, big deal. Potential illegal use of phone records, its OK because we are hunting a traitor. Killing Americans without oversight - meh - they are just all brown skinned terrorists.

But hey, you might disappoint me eventually. It did take you about two weeks before you back-pedalled enough on drones to un-equivocally call that wrong too. That was a sad day. "

Actually I am glad not to disappoint!

I am HAPPY the press got patriot-acted.

I don't like the Patriot Act. I like civil liberties. I think the press gave Bush a pass on his unconstitutional actions...and Obama as well. NOW that they are the target, maybe something will be done about it.

I don't care one whit about the IRS "abuses." I can see no reason to give tea party organizations tax free status...they are not charities. They are political organizations. Then again, I am also in favor of taxing religious institutions that own businesses. I would also bet if you look at some "occupy" groups they were also given extra scrutiny, and I agree with that as well.

Finally, though, on drones.

This issue amazes me. It really does! Do conservatives honestly support letting terrorists run free if they are American citizens living in tribal regions of Pakistan or Yemen? They are outside the reach of our government and even the local government. They use the internet to recruit and train murderers. Do you guys REALLY hate Obama so much you would rather let terrorists run free and kill Americans? Or, are you such a fan of the constitution that you feel it is necessary that Americans die to protect our freedoms? This is a serious question, by the way.....and it applies to liberals as well.

For my part, I am glad when I hear of a drone strike. It means Al Qaeda lost a soldier, at the least....and maybe it lost a leader.

What is not to like?
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Though it fits well with the usual rightwing whining that Obama's to blame for everything since Hoover, that's not their primary motivation here. They're trying to get ahead of the IRS questioning their partisanship. If they can't neuter the IRS before it classifies them accurately, they're gonna die even sooner than expected.


That's certainly part of it. That's why I find it so puzzling that no one is asking why partisan political groups are applying for non-profit status in the first place. The idea that the tea party is primarily a social welfare organization and that it's primary activities are not political is a joke. They're not only primarily partisan and political, they're explicitly partisan and political.

But that doesn't fully explain this "scandal." Read an interesting piece about why Mitch McConnel is pushing this: he fears a tea party challenger when he runs for reelection and this will put him in their good graces. Some dinosaurs in the GOP are terrified of the tea party. Boener just held another vote to repeal Obamacare (the 37th) just so congressional freshmen who'd missed the 36 previous votes can tell their constituents they voted against it. The Republican Party has become like a cult, holding ritual votes and paying tribute to fearsome bogeymen.
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That's why I find it so puzzling that no one is asking why partisan political groups are applying for non-profit status in the first place.

Because political groups are allowed to apply for non-profit status under 501(c)(4). Many political activities fall within the definition of social welfare - advocating for political outcomes, lobbying legislation, registering voters and increasing awareness of various issues. They're even allowed to engage in election-related activity up to a point. They're just not allowed to be primarily involved in election activity.

Albaby
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That's why I find it so puzzling that no one is asking why partisan political groups are applying for non-profit status in the first place.

Because political groups are allowed to apply for non-profit status under 501(c)(4).


Well, anyone can apply. The question is whether they're qualified or not. Approval isn't supposed to be automatic.

Many political activities fall within the definition of social welfare - advocating for political outcomes, lobbying legislation, registering voters and increasing awareness of various issues. They're even allowed to engage in election-related activity up to a point. They're just not allowed to be primarily involved in election activity.

What tea party group is not primarily involved in election activity?

Anyway, that's not the rule. This is:

To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted only to charitable, educational, or recreational purposes. [I.e. it can't go to candidates or campaigns.]

And remember, this isn't about whether donations to c4's are tax deductible. They aren't. It's about whether the groups themselves pay tax on the donations.

More from Pub 557, specifically about political activity:

Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, 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.

The explicit purpose of the Tea Party is to directly participate in political campaigns and to oppose certain candidates, both Democrats and certain Republicans. The tea party is not organized exclusively to promote social welfare. It is organized primarily to organize for and against political candidates. The top story on its website today is headlined "Impeach Obama." If that's not political, nothing is.

The reason this is much ado about nothing is that even political organizations are entitled to the tax exemption these groups were seeking. In other words, they didn't even have to apply.

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.

No harm. None of these groups were deprived of anything. If they were "harassed," -- assuming being asked to prove you're not a political organization even though your name indicated you are one is harassment - it's because they applied for a tax exemption they neither needed nor qualified for. All they had to do is file a Form 1120-POL with their tax return.
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The explicit purpose of the Tea Party is to directly participate in political campaigns and to oppose certain candidates, both Democrats and certain Republicans. The tea party is not organized exclusively to promote social welfare. It is organized primarily to organize for and against political candidates. The top story on its website today is headlined "Impeach Obama." If that's not political, nothing is.

The "Tea Party" is not a single organization - remember, we're talking literally scores of different groups that filed. The fact that another organization with a similar, or even the same, name as an applicant might be engaged in campaing activities does not mean that the applicant is engaged in those activities. Government is not allowed to treat people differentially just because of the name they choose for their organization like that.

It should be noted that political activity is expressly permitted to 501(c)(4) organizations - indeed, the IRS has made it clear that attempting to influence legislation is itself a social welfare activity:

As long as the legislation that an organization attempts to influence is germane to its social welfare purposes, the organization is engaged in activities that further social welfare purposes.

http://www.irs.gov/irm/part7/irm_07-025-004.html#d0e332

....which is why groups like Mayors Against Illegal Guns have organized as 501(c)(4), even though they are definitely all about whipping up political influence in favor of their desired legislative outcomes.

The reason this is much ado about nothing is that even political organizations are entitled to the tax exemption these groups were seeking. In other words, they didn't even have to apply.

But they were denied the opportunity for an impartial review of their application. And it it is specious to claim that there's no consequence to that. Once the IRS failed to grant them that tax-exempt status, it would have been foolhardy for them to proceed based on the assumption that their activities would have ultimately been found to be tax exempt.

The whole point of being able to apply for these things is to get a safe harbour - to put the question to the IRS before you engage in various activities, so that you don't get sandbagged with a tax consequence at the end of the year if the IRS disagrees with your status. If the IRS starts improperly raising questions about your status when you apply for that safe harbour, not only are you denied the benefit of the determination, but you also have to question whether you will be found to qualify for the exemption at all. The IRS improperly created greater uncertainty for these groups during a time of intense public discussion of the health care law, budget issues, and other matters of public import that they would have liked to have had the opportunity to be active in, but were hindered by the IRS' behavior.

I would point out that no one from the Administration has claimed that the IRS' activity was appropriate (or harmless, for that matter). Indeed, the fact that all of these requests were ultimately approved makes the matter worse for the agency - the only effect of the review was to delay these groups from getting a confirmation to which they were legally entitled to get, and conservative groups were singled out to bear more of that burden of delay than other groups, based solely on their ideological self-identification. That's just wrong.

Albaby
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The "Tea Party" is not a single organization - remember, we're talking literally scores of different groups that filed. The fact that another organization with a similar, or even the same, name as an applicant might be engaged in campaing activities does not mean that the applicant is engaged in those activities.

I agree, but that's why the IRS was, in my opinion, correct to ask for additional information. The Al Qaeda Bowling Club, may have nothing at all to do with Al Qaeda, but it's not crazy to ask them to prove it.

Government is not allowed to treat people differentially just because of the name they choose for their organization like that.

Sure they are. See above.

It should be noted that political activity is expressly permitted to 501(c)(4) organizations - indeed, the IRS has made it clear that attempting to influence legislation is itself a social welfare activity:

As long as the legislation that an organization attempts to influence is germane to its social welfare purposes, the organization is engaged in activities that further social welfare purposes.


We can play "Read the IRS Rules" all day. Whether these groups were primarily social welfare organizations or political organizations doesn't really matter. Both are eligible for tax-exempt status. But when a group files for (c)(4) status, it's not only reasonable, it's expected that the IRS verify the group's eligibility by asking groups that engage in political activity to prove that they're primarily social welfare organizations, not political groups. What the IRS did wrong in this case is to use a reasonable, but impermissible "flag" to identify groups that were likely to be primarily political in their activities.


Once the IRS failed to grant them that tax-exempt status, it would have been foolhardy for them to proceed based on the assumption that their activities would have ultimately been found to be tax exempt.

To my knowledge (and alarm) the IRS didn't deny any of the applications in question. It asked the groups for more information. (And some of that information they weren't allowed to ask for.) Again, political organizations are eligible for the same tax exemptions as 501(c)(4) groups. Political groups don't even have to apply for the tax-exemption, which has to make you wonder why the tea party groups bothered to apply for 501(c)(4) status. Ignorance, I suppose.


I would point out that no one from the Administration has claimed that the IRS' activity was appropriate (or harmless, for that matter).

The IRS's behavior was inappropriate. While its supposed to check out these dubious applications, it's not supposed to use explicitly political criteria for determining which applications to scrutinize. Also, the agents or clerks were confused by the regulations and asked these groups (and probably others) to provide information the IRS was not entitled to ask for.

It was harmful as was well, but not to the questioned groups -- except, as I've said, for the time and cost of dealing with the IRS requests. (But then they could have avoided all that by not applying for a tax-exempt status they neither needed nor qualified for.) What the IRS did was harmful because it calls into question its political independence and fairness even though there's little, if any evidence, that this kaffuffle was anything other than bureaucratic confusion and incompetence.

The real harm, to my mind, is that the larger issue of whether or not political organizations masquerading as social welfare organizations should receive preferential tax treatment or not has been lost in all this. Now, any attempt to curtail this abusive practice will be suspect.
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Once the IRS failed to grant them that tax-exempt status

So that means the proper supporting paperwork was NOT filed--by choice. Claiming "it is hard" is not a valid excuse.

conservative groups were singled out

Any group including the words "patriot" or "tea party"--which means all the non-rightwing 501c4 application groups were similarly targeted and rejected (if we accept the basic claim).
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To my knowledge (and alarm) the IRS didn't deny any of the applications in question. It asked the groups for more information. (And some of that information they weren't allowed to ask for.) Again, political organizations are eligible for the same tax exemptions as 501(c)(4) groups. Political groups don't even have to apply for the tax-exemption, which has to make you wonder why the tea party groups bothered to apply for 501(c)(4) status. Ignorance, I suppose.

Or, it could be that these groups were poking the IRS in the eye, daring it to deny their 501(c)(4) applications on political grounds so they could make a big fuss about it. Seems a bit too conspiratorial, but it is odd that the IRS got spammed with so many apps from groups that didn't even need to apply for tax-exempt status.
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I agree, but that's why the IRS was, in my opinion, correct to ask for additional information. The Al Qaeda Bowling Club, may have nothing at all to do with Al Qaeda, but it's not crazy to ask them to prove it.

They're not correct to ask for additional information. The IRS is not permitted to single anyone out for having a particular ideology. It is worth noting that no one from the Administration has argued that this type of differntiation based on the name "Tea Party" was defensible. It is not. It was wrong.

It was harmful as was well, but not to the questioned groups -- except, as I've said, for the time and cost of dealing with the IRS requests.

It was harmful to those requested groups, because the failure to approve their applications in a timely manner sends the de facto message that their tax exempt status was questionable, while non-conservative groups were far more likely not to get wrongfully sent that determination. These groups were therefore placed in a position where they ought to have (and many did) refrained from engaging in activity that they were otherwise planning to do until that issue was resolved. That was not fair, and detrimental to groups who wanted to engage in lawful participation in public discourse in a timely manner.

The real harm, to my mind, is that the larger issue of whether or not political organizations masquerading as social welfare organizations should receive preferential tax treatment or not has been lost in all this. Now, any attempt to curtail this abusive practice will be suspect.

Again, none of these groups that were subjected to this more intensive scrutiny were ultimately denied - which makes it exceptionally unlikely that these were organizations that were not entitled to that exemption, or these groups were engaged in any abusive practices. Instead, conservative groups were differentially forced to undergo extensive delays in the processing of their requests to a different degree than nonconservative groups.

Albaby
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So that means the proper supporting paperwork was NOT filed--by choice. Claiming "it is hard" is not a valid excuse.

The IRS requested information that they were not permitted to require - not "proper supporting paperwork."

Any group including the words "patriot" or "tea party"--which means all the non-rightwing 501c4 application groups were similarly targeted and rejected (if we accept the basic claim).

Those phrases were disproportionately used by groups of a conservative/libertarian ideological bent - they're not ideologically neutral words (like "campaign" or "election").

Albaby
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I agree, but that's why the IRS was, in my opinion, correct to ask for additional information. The Al Qaeda Bowling Club, may have nothing at all to do with Al Qaeda, but it's not crazy to ask them to prove it.
_______________________________


Even were it not improper to go even this far by name, your premise is worth noting.

You are putting guilt on a group that there was ZERO reason to single out, even if singling out was in fact proper.

The underlying assumption is something you really need to take a gander at.

This is just flat out evil, it transcends wrong, you unconditionally wanted your political opponents to be hassled simply because they were your opponents.

My GOD. Are you really that screwed up? This is just so screwed up, that it is nearly unbelievable.
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They're not correct to ask for additional information. The IRS is not permitted to single anyone out for having a particular ideology.

Those are two different things. They're right to ask groups with political names whether they're primarily social welfare or political in their activities. They're wrong to do it only to one kind of political group, but not others. (An unanswered question here is whether they received many applications from Democrat-aligned groups. If 99% of the political-flavored applications were from tea party groups, you'd expect them to receive the most scrutiny.)

It is worth noting that no one from the Administration has argued that this type of differntiation based on the name "Tea Party" was defensible. It is not. It was wrong.

And I agree. That's not how they're supposed to do it.



It was harmful to those requested groups, because the failure to approve their applications in a timely manner sends the de facto message that their tax exempt status was questionable, while non-conservative groups were far more likely not to get wrongfully sent that determination.

I think you're making that last part up. Non-political groups are far more likely to not be asked to prove their non-political nature. The Smithville Garden Club doesn't invite attention. The "Blood of Tyrants Party" does. It's sort of crazy that the IRS can't use word flags to determine which non-profit apps to look at more closely.


These groups were therefore placed in a position where they ought to have (and many did) refrained from engaging in activity that they were otherwise planning to do until that issue was resolved.

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.


That was not fair, and detrimental to groups who wanted to engage in lawful participation in public discourse in a timely manner.

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.

The fact is that these groups applied for a status they didn't need and didn't qualify for. The IRS got tangled up in trying to process these questionable applications and made serious mistakes in how it handled them. Other than it being a huge wast of time for the IRS and an embarrassment to the administration, no one was harmed.


Again, none of these groups that were subjected to this more intensive scrutiny were ultimately denied - which makes it exceptionally unlikely that these were organizations that were not entitled to that exemption, or these groups were engaged in any abusive practices.

Not exactly. It could also mean that having screwed up the process so badly, the IRS gave them all a pass so as not to invite even more howling. Besides, it makes little if any practical difference whether they're tax-social welfare groups or tax-exempt political groups.


Instead, conservative groups were differentially forced to undergo extensive delays in the processing of their requests to a different degree than nonconservative groups.

Right. Because these groups were associated with a group that is explicitly political and therefore deserved additional scrutiny.

Again, the harm done to the groups barely rises above the level of inconvenience, the time and cost of complying with IRS requests for proof that they're no primarily political groups, which they are.

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?
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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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You are putting guilt on a group that there was ZERO reason to single out, even if singling out was in fact proper.

You are confused.

I'm not placing guilt anywhere. The Tea Party groups applying for 501(c)(4) status aren't guilty of anything... except maybe stupidity. They didn't even need 501(c)(4) status to operate as tax-exempt political organizations. They're not really eligible for 501(c)(4) anyway since they're not social welfare groups regardless of what the IRS eventually determined.


See if you can follow this:

The Tea Party is a political movement. It's explicit and primary purpose is political. Today, for example, it's website is calling for Obama's impeachment. It routinely backs candidates and attacks others.

501(c)(4) tax-exempt status is for social welfare organizations, not political organizations, although there is an exception for social welfare groups engaging in limited political activity if they provide the IRS proof that the are primarily non-political.

Groups that apply for 501(c)(3) status that have political buzzwords in their names deserve to be looked at more carefully than those that don't. The should be asked to provide information proving their eligibility. The IRS's problem in this case was that they improperly flagged one set of political buzzwords ("tea party, "patriot," etc.) and not others ("occupy," "justice," etc.) because in 2010-11 they received tons of one but not the other. The IRS also asked for information it was not entitled to.
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I agree, but that's why the IRS was, in my opinion, correct to ask for additional information. The Al Qaeda Bowling Club, may have nothing at all to do with Al Qaeda, but it's not crazy to ask them to prove it.
_______________________________

Even were it not improper to go even this far by name, your premise is worth noting.


I think I missed your point. You certainly missed mine.

It's an example, not a comparison.
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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.


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.



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.

What non-conservative political groups had their 501(c)(3) applications approved without being asked for additional information?

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.
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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.

Albaby

Albaby
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Once more, with feeling

Albaby makes me chuckle when he argues with biased and blind liberals like Felix.

So ever patient.
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Albaby makes me chuckle when he argues with biased and blind liberals like Felix.
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I find myself really feeling very bad for Felix, usually by this point he would have taken some small piece of an out of context sentence and declared he won by reinterpreting even that tidbit. He can't do that with someone that leans liberal and keep his standing.

Poor baby
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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.
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But this is factually untrue.


It's not the least bit untrue.

(1) 501(c)(4) is the section of the tax code dealing with social welfare organizations.

(2) Political organizations don't need 501(c)(4) status to be tax exempt. All they need to do is file a FORM 1112-POL with their return.


As noted repeatedly in this thread, all of these organizations were eventually granted their 501(c)(4) status.

After the kind of review people are now squealing about and despite the fact they're not primarily social welfare organizations, but are instead political organizations. (I think the granting of the status was political. Having bungled the process, the IRS waved them through even though they don't technically qualify. The practical implications are nil anyway.)



All of them properly filed for a designation that they qualified for.

I disagree. And again, whether they filed for 501(c)(3) and whether they were granted 501 (c)(3) status is irrelevant to my argument. They didn't need 501(c)(3) status to be tax exempt and therefore the status, its delay or denial, didn't affect their operations. In effect, they were seeking a "permit" they didn't need and (in my opinion) didn't qualify for in the first place. Tea party groups are explicitly and primarily political groups. As I've said repeatedly, political groups don't need 501(c)(3) status.
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(1) 501(c)(4) is the section of the tax code dealing with social welfare organizations.

(2) Political organizations don't need 501(c)(4) status to be tax exempt. All they need to do is file a FORM 1112-POL with their return.


But these groups weren't seeking to register as political organizations; rather, they were seeking confirmation that they were social welfare organizations. Ultimately, they were found to be social welfare organizations.

I disagree. And again, whether they filed for 501(c)(3) and whether they were granted 501 (c)(3) status is irrelevant to my argument. They didn't need 501(c)(3) status to be tax exempt and therefore the status, its delay or denial, didn't affect their operations. In effect, they were seeking a "permit" they didn't need and (in my opinion) didn't qualify for in the first place. Tea party groups are explicitly and primarily political groups. As I've said repeatedly, political groups don't need 501(c)(3) status.

I know you disagree. Your argument is premised on the assumption that these groups weren't 501(c)(4) entities in the first place, and thus could not have been prejudiced by any failure to certify them. But that assumption is factually unsupported. All of them were eventually found to meet the requirements for 501(c)(4).

Given the scores of groups that were found to be eligible for 501(c)(4) designation, your opinion that tea party groups are "explicitly and primarily political groups" is not borne out by the facts. A group that calls itself "Tea Party" can be a political group - there are lots of 527 groups that call themselves "Tea Party." And a group that calls itself "Tea Party" can also be a social welfare group - again, there are lots of 501(c)(4) groups with "Tea Party" in their name.

Albaby
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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.

Thus, the premise could be made that--out of thousands of applications--24 were found to be suspiciously odd or "too similar" to be a coincidence.

Then, when a brouhaha was kicked up about it by conservatives, the govt simply let it go because the approvals were not really required in the first place.

So, to put it into perspective, if I file a request for a permit for a 250-kiloton nuclear weapon for self-protection (and perhaps a few smaller nukes for hunting purposes), what does the govt do? Second Amendment--right? So, I have the right to buy and possess the gun of my choice. They have to grant the permit, so now it is just a matter of which nuclear weapon I should buy--or produce for my own use (thus avoiding the potential interstate problem of shipping it to me from elsewhere). Why isn't the NRA protecting the public from the govt--as in my situation?

If the govt can deny me the right to buy the gun of my choice, they can do the same to everyone else.
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So, to put it into perspective, if I file a request for a permit for a 250-kiloton nuclear weapon for self-protection

Perspective??!! LMAO.
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But these groups weren't seeking to register as political organizations; rather, they were seeking confirmation that they were social welfare organizations. Ultimately, they were found to be social welfare organizations.

I know. Wrongfully, in my opinion. But that doesn't matter. We're talking about damages.

(1) 501(c)(3) status is irrelevant to donors, so they didn't lose donations because of the delay.

(2) The groups are automatically eligible for tax-exempt status as political organizations, so they were never disadvantaged there either. Unless they can show that they paid unnecessary taxes. No one's made that claim to my knowledge.

(3) Damages, if you can call them that, pertain to the time and expense of complying with IRS requests for further information in support of their 501(c)(4) applications. But complying with a request for more info is almost never considered damages. It'd be especially hard to consider them damages in this case because the IRS is supposed to ask questionable groups for more info. What it's not supposed to do is single out some questionable groups based on party affiliation or whatever.

I wrote elsewhere that this is similar to being the only one pulled over for speeding on the highway when there are lots of other cars going as fast as you. If the cop pulled you over because you were driving a Ferrari and everyone else was in a Ford, it's wrong, but it doesn't mean you weren't speeding.
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(1) 501(c)(3) status is irrelevant to donors, so they didn't lose donations because of the delay.

It's 501(c)(4), and how do you know that it's irrelevant to donors? Our law firm has a weekly 'casual day' where proceeds go to a selected organization that employees nominate - but only 501(c) organizations are eligible to participate.

(2) The groups are automatically eligible for tax-exempt status as political organizations, so they were never disadvantaged there either. Unless they can show that they paid unnecessary taxes. No one's made that claim to my knowledge.

You keep saying this, but there are things you need to do to register as a 527 organization that go beyond the filing of the end-of-year form FORM 1112-POL. You have to file a notice before the organization begins its activities and periodic disclosures throughout the year. If you go through the year thinking you're tax-exempt as a 501(c)(4), and the IRS later disagrees with you, you can't just wave a magic wand and have that go away. You're in trouble - and you have to be aware of that before you start engaging in your activities.

I wrote elsewhere that this is similar to being the only one pulled over for speeding on the highway when there are lots of other cars going as fast as you. If the cop pulled you over because you were driving a Ferrari and everyone else was in a Ford, it's wrong, but it doesn't mean you weren't speeding.

Except you weren't speeding. That's the point - these folks weren't speeding. They met the requirements, and didn't deserve to get pulled over. They got pulled over for months while other cars got to go on to their destination. Plus, these groups are trying to influence time-sensitive public policy decisions (like the health care act and budget decisions) - so unlike your highway example, they are disadvantaged in pursuing their goals by the fact that other cars aren't stopped also. Those other drivers are going to get where they're going ahead of you, because you got stopped. Plus, change "driving a Ferrari" to "having an Obama bumper sticker" and you get closer to the actual situation.

Albaby
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It's 501(c)(4)...

I know. I keep making that mistake because 501(c)(3) is more common and I'm involved with a couple of those.

...and how do you know that it's irrelevant to donors?

It's irrelevant for tax purposes. Donations to (c)(4)'s aren't tax deductible. The income to the organization is tax-exempt.

Our law firm has a weekly 'casual day' where proceeds go to a selected organization that employees nominate - but only 501(c) organizations are eligible to participate.

Okay. Good luck proving in court that Joe Blow didn't don't money to the Tea Party Committee of East Smithville because its (c)(4) status was still under review even though it makes no difference at all with regard to the deductibility of the donation.

Except you weren't speeding. That's the point - these folks weren't speeding. They met the requirements, and didn't deserve to get pulled over.

That's where I fundamentally disagree with you. I've posted links to the IRS rules several times explaining why. These groups are primarily political organizations not social welfare groups. (I can't beleive anyone can dispute this.) And those that aren't primarily political are political enough to warrant additional scrutiny. The fact that the IRS eventually caved and granted them all status is political, in my opinion, an attempt to placate and avoid a political "scandal" over what was in reality bureaucratic screwup... as if that ever works.
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Perspective??!! LMAO.

So I do NOT have the right to "self defense"--per the Second Amendment to the US Constitution?
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Good luck proving in court that Joe Blow didn't don't money to the Tea Party Committee of East Smithville because its (c)(4) status was still under review even though it makes no difference at all with regard to the deductibility of the donation.

I doubt they would try to prove that. Rather, they'll say that they limited their fundraising activities and direct expenditures pending IRS review because they didn't know whether they could travel under 501(c)(4) rules or were under the 527 rules.

These groups are primarily political organizations not social welfare groups. (I can't beleive anyone can dispute this.)

This is where I don't really understand where you're coming from - you seem to be assuming that political groups and social welfare groups are mutually inconsistent. They are not, under the regulations. A group that is primarily formed to accomplish political goals - to promote gun control, to secure passage of health care reform, etc. - is a social welfare group. The term 'social welfare' draws a distinction between groups that lobby to secure a benefit for themselves versus those who lobby to secure what they believe is a benefit to society. Social welfare groups are allowed to be political actors, and are allowed to have their primary activity be political action - so long as their primary political activity is not directly participating in an actual election.

This interpretation of the rules well predates the current IRS scandals. For example, here's an IRS publication from the mid-1990's describing how groups advocating particular political ideologies or policy positions (such as the anti-abortion group referenced therein) qualify under 501(c)(4), and can also engage in direct political activity as long as it is not the primary activity:

http://www.irs.gov/pub/irs-tege/eotopicm95.pdf

I just don't see any support for your claim that these groups do not meet the criteria for approval under 501(c)(4), other than your (mistaken) claim that political groups can't be social welfare groups. The latter are restricted somewhat in the specific type of political action they can engage in, but are free to be completely directed towards political action as long as the majority is not directly related to specific elections.

Albaby
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"If this is an example of Chicago-style political hardball, I'm Al Capone."

I think some of you are whistling past the graveyard on this one. Whether or not it gets as high up as the president is the only question. That it is one of the biggest scandals since Nixon goes without question.
Of course, now as then, the cover-up could be the real issue.
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...you seem to be assuming that political groups and social welfare groups are mutually inconsistent.

No. THey're not mutually exclusive. They're overlapping sets. How a political group qualifies as a social welfare organization is outlined in the IRS docs I've provided.

Social welfare groups are allowed to be political actors, and are allowed to have their primary activity be political action - so long as their primary political activity is not directly participating in an actual election.

Not exactly, but pretend that it is. Many, maybe most, tea party groups directly participate in elections. Whether all do or not isn't important. Enough do to warrant additional IRS attention.

...here's an IRS publication from the mid-1990's describing how groups advocating particular political ideologies or policy positions (such as the anti-abortion group referenced therein) qualify under 501(c)(4), and can also engage in direct political activity as long as it is not the primary activity:

http://www.irs.gov/pub/irs-tege/eotopicm95.pdf


Thanks. My argument is that political activity is the Tea Party's primary activity. And I don't see how anyone can reasonably argue otherwise.


I just don't see any support for your claim that these groups do not meet the criteria for approval under 501(c)(4), other than your (mistaken) claim that political groups can't be social welfare groups.

That's not my claim. My claim is that political groups applying for 501(c)(4) status deserve additional scrutiny, not that they automatically are ineligible.
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That it is one of the biggest scandals since Nixon goes without question.

You wish. This is nothing compared to Nixon using the IRS to bludgeon opponents. The only thing the two have in common is that they involve the IRS.
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That's not my claim. My claim is that political groups applying for 501(c)(4) status deserve additional scrutiny, not that they automatically are ineligible.

I thought that you stated above that these groups shouldn't have been approved - that they did not meet the criteria for 501(c)(4) status, and were only approved because the IRS wanted to mitigate the scandal. That's how you concluded that there was no harm to them, since they never should have been applying for this particular status in the first place - they should have been applying as 527's.

If you're claiming that political issue groups need additional scrutiny - not that they're ineligible - then we're back to the main issue again. The IRS categorically subjected conservative groups to additional scrutiny that they did not categorically apply to progressive groups - all of the signifiers that they used for their BOLO screens were associated with conservative movements.

Albaby
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That's not my claim. My claim is that political groups applying for 501(c)(4) status deserve additional scrutiny, not that they automatically are ineligible.
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I thought that you stated above that these groups shouldn't have been approved - that they did not meet the criteria for 501(c)(4) status, and were only approved because the IRS wanted to mitigate the scandal.


Yes. Without looking at the details of their applications, I think many, if not all, of these groups do not meet the IRS's definition of a social welfare group. That's not to say all political orgs do not.


That's how you concluded that there was no harm to them, since they never should have been applying for this particular status in the first place - they should have been applying as 527's.

That's not the only reason I believe they suffered no harm and not how I came to that conclusion. (I didn't say anything about applying as 527s.) I said they can't claim they suffered harm because their tax-exempt status was in limbo, because their tax-exempt status was never in limbo. They're tax-exempt as political organizations regardless of 501c4 status. Maybe there's some additional benefit c4 status confers and they could claim damages based on that.


If you're claiming that political issue groups need additional scrutiny - not that they're ineligible - then we're back to the main issue again.

No. I'm not saying all political groups aren't eligible. I'm saying most aren't (or shouldn't be.) All political groups applying for 501c4 status as social welfare organizations deserve extra scrutiny because 501c4 groups aren't supposed to engage in politics, with limited exceptions. Some will qualify under the exceptions. I don't believe most tea party groups do because their primary purpose is the support and opposition of political candidates. They're mission isn't charity or education They both directly and indirectly intervene in political campaigns, which is explicitly forbidden. Obviously, the IRS caved and granted them status anyway.


The IRS categorically subjected conservative groups to additional scrutiny that they did not categorically apply to progressive groups - all of the signifiers that they used for their BOLO screens were associated with conservative movements.

Yes. That's what was wrong about what they did. Their screens were specific to orgs with words like "tea party" and "patriot"in their names. That appears to be because there was a flood of "tea party" applications at the time (and relatively few "occupy" applications.) The employees in Cincinnati say they did this for convenience and fairness, not political reasons. The IRS IG came to a similar conclusion. Whether you believe them or not is another matter. Personally, I find it difficult to believe a Bush appointee, who headed IRS at the time, would condone the targeting of conservative groups. And there's no evidence - none - that that is what happened. The facts show that when higher ups in the IRS got eind of this, they put a stop to it and apologized. That's not exactly how you go about harassing your political opponents.
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I wrote elsewhere that this is similar to being the only one pulled over for speeding on the highway when there are lots of other cars going as fast as you.

LOL, you suck at analogies.

This is more like 200+ people being pulled over for DWB (driving while black) on belief that they are all transporting drugs - yet not a single one is found to be doing such.

Let's try that and measure the outrage.
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Without looking at the details of their applications, I think many, if not all, of these groups do not meet the IRS's definition of a social welfare group.

On what basis? You don't know anything about these groups at all, beyond the name "tea party."

That's not the only reason I believe they suffered no harm and not how I came to that conclusion. (I didn't say anything about applying as 527s.) I said they can't claim they suffered harm because their tax-exempt status was in limbo, because their tax-exempt status was never in limbo. They're tax-exempt as political organizations regardless of 501c4 status.

Why do you conclude they are tax-exempt as political organizations? The form you cited upthread is the end-of-year form for 527 groups (which are the tax-exempt political groups that these groups would otherwise qualifying) - but there are specific requirements that have to be met for 527 status. You have to register them upfront, and you have to do periodic reports throughout the year. A political organization cannot fail to do those things without consequences. So they can't just take a flier and wait until the end of the year to figure out how they are to proceed.

All political groups applying for 501c4 status as social welfare organizations deserve extra scrutiny because 501c4 groups aren't supposed to engage in politics, with limited exceptions. Some will qualify under the exceptions. I don't believe most tea party groups do because their primary purpose is the support and opposition of political candidates. They're mission isn't charity or education They both directly and indirectly intervene in political campaigns, which is explicitly forbidden. Obviously, the IRS caved and granted them status anyway.

Once again, you seem to be misconstruing the rules for social welfare groups. Intervention in political campaigns is not explicitly forbidden - it is explicitly permitted. It merely cannot be their primary activity. And their primary activity can be political, as long as it isn't intervention in political campaigns.

Yes. That's what was wrong about what they did. Their screens were specific to orgs with words like "tea party" and "patriot"in their names. That appears to be because there was a flood of "tea party" applications at the time (and relatively few "occupy" applications.)

There was no flood of applications at the time:

http://www.theatlantic.com/politics/archive/2013/05/there-wa...

And the issue that we've been discussing isn't 'how high' it went, or whether the groups were damaged because of political intent or simple maladministration - but merely whether they were damaged by the wrongful activity of the IRS. There will be more review of the matter, but it certainly seems as though there's a decent case for that.

Albaby
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