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Friday, March 9, 2012

NY Times Backs IRS Efforts to Out Donors to Tea Party, Other 501(c)(4) Groups

Following up on yesterday's post, IRS May Out Donors to Tea Party, Other 501(c)(4) Groups: New York Times editorial, The IRS Does Its Job:

Taxpayers should be encouraged by complaints from Tea Party chapters applying for nonprofit tax status at being asked by the IRS to prove they are “social welfare” organizations and not the political activists they so obviously are. Tea Party supporters claim they are being politically harassed with extensive IRS questionnaires. But the service properly contends that it must ensure that these groups are “primarily” engaged in social welfare, not political campaigning, to merit tax exemption under § 501(c)(4).

Such IRS inquiries are long overdue and should be applied across the board to the growing number of organizations, allied with the major political parties, that are also ludicrously posing as “social welfare” groups. Legitimate social welfare organizations are allowed limited political activity. But these political offshoots are using that tax status in a transparent ploy to keep big donors secret while funneling the money to campaigns. Chief among these groups are American Crossroads, the campaign machine created by Republican guru Karl Rove, and Priorities USA, the Democratic counterpart founded by former White House aides, now openly encouraged by President Obama as he runs for re-election. ...

All these groups should be operating as political organizations required to disclose their donors under the law. Blatant abuses of tax law and common sense are part of the laissez-faire dynamic that is driving the 2012 campaigns. The IRS must not flinch from its duty to enforce the tax code and root out political operatives who are abusing the law and conning taxpayers and voters.

http://taxprof.typepad.com/taxprof_blog/2012/03/ny-times--1.html

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Comments

These groups may not be in the right IRS category, and as long as the law/requirements are applied EVENLY, to both right and left leaning groups, that's ok with this taxpayer. However, if the IRS is being used by the Obama administration to harass Tea Party and other conservative groups alone, then that is blatant thuggery and must not be tolerated.

Posted by: Bad Actor | Mar 10, 2012 5:00:00 AM

501(c)(4) includes political groups (that promote the social welfare). Read the IRS code

Posted by: RP Rice | Mar 10, 2012 7:10:03 AM

Loss of freedom of speech and association and harassment by "activists" is a small price to pay for all of the wonderful Hope&Change! that we're getting.

Posted by: Bobo from Texas | Mar 10, 2012 7:22:32 AM

It is only right that fascist front organizations should have to open their books if they are going to pick the pockets of taxpayers they are trying, theoretically, to protect.

Posted by: George W | Mar 10, 2012 11:59:43 AM

Wasn't there a Supreme Court decision once (was it involving the NAACP,ome 1930-60 period?) that said groups didn't have to disclose their members? How does that apply here?

Also, how is it that political campaigns must disclose their (rather paltry) donations?

Posted by: Eric Rasmusen | Mar 11, 2012 6:27:26 AM

the Code states that the organization must "exclusively" promote social welfare. It is only the Regs that give the absurdist reading that "exclusive" means "primarily" (which is substantially less than exclusive, which means all).

so a 501(c)(4) that does some political activity needs to engage non-political activity that primarily promotes social welfare. if the organization is primarily engaged in political it will not qualify as a 501(c)(4).

Posted by: tax guy | Mar 11, 2012 5:30:05 PM

So why isn't the IRS going after MediaMatters and the liberal groups? This smacks of the same bias in the media when Rush Limbaugh is hung out to dry for making a nasty remark about a liberal but the liberals have said the most horrible things about Sarah Palin, Michele Malkin and many other conservative women and nothing happens to them. President takes donations from the very people that said horrible things about conservative women. It was reported on the TV MediaMatters was plotting to take down FOX News. How come they have not had their tax free status taken away. How is plotting to take down a news station educational. Time to make ALL 501 c 4 and 501 3 c organizations open their books. That is ALL of them not just the ones you want to shut down because they voice they do not support the progressive agenda.

Posted by: Karen Bracken | Mar 12, 2012 6:07:13 AM