The IRS Scandal, Day 780

Forbes:  Joan Farr Claims IRS Denial Of Exempt Status Is Example Of Persecution Of Christians, by Peter J. Reilly:

Joan Farr tells me that the IRS denial of exempt status to the Association For Honest Attorneys is another instance of an organization being persecuted because it is Christian and conservative.  I contacted Ms. Farr, because I was pretty sure that PLR 201524206, a revocation of exempt status, was referring to A.H.A.!. (On the A.H.A.! website she is listed as Joan Heffington, which is the name she used while running for Governor of Kansas in the 2010 Republican primary.  In her 2014 run for the Senate as an independent she went by Joan Farr. Ms. Farr is a widow and Farr was her maiden name which she has readopted.) Ms. Farr confirmed that A.H.A.! was the organization in the ruling. ...

Ms. Farr indicates the “facts” in the ruling are inaccurate.  Here is the IRS version. The agent determined that some of the services that AHA provided for compensation were not related to its exempt purpose and should have been taxed as UBTI.

The agent found many transactions for personal expenses and at least one instance of an expenditure related to the campaign for governor.

During the review of the bank statements, the agent found a check written to “cash”. The memo section the check reflected “cash for campaign“. The agent asked to provide the exempt purpose of this payment. said this check was for repayment of the loan.

So you have UBTI, inurement and political activity.  Other than that Mrs. Lincoln how did you enjoy the play?

Ms. Farr had loaned the organization a lot of money, so any expenditures not related to the exempt purpose were actually loan repayments.  This ended up leading to an attempt to reconstruct the loan balance, which took a lot of effort on Ms. Farr’s part, but ended up not satisfying the IRS.

Ms. Farr indicated that AHA had never grossed more than $25,000 meaning it never had to file a complete Form 990.  Based on the drama about the loan balance, it was clear that nobody was maintaining a general ledger.  Revenue agents are trained as accountants and it makes accountants happy when they have a general ledger with everything classified.  I also have to say that having an entity pay back your loan by paying your bills for you is a very bad idea.  If there had been a general ledger with those items charged to the officer loan accountant that would have been better, but much better would be the two step process of a loan repayment via a check to Ms. Farr and her paying the bills out of her personal account.

I can’t rule out that the selection of her organization for audit had something sinister behind it, but having spoken to her a bit, I could understand how she might exhaust the patience of a revenue agent.  Inserting an accountant between her and the IRS might have saved the day.  On the other hand you have to wonder why this organization would be a priority with the IRS.

• The IRS Scandal, Day 779 (June 27, 2015)
• The IRS Scandal, Day 778 (June 26, 2015)
• The IRS Scandal, Day 777 (June 25, 2015)
• The IRS Scandal, Day 776 (June 24, 2015)
• The IRS Scandal, Day 775 (June 23, 2015)
• The IRS Scandal, Day 774 (June 22, 2015)
• The IRS Scandal, Day 773 (June 21, 2015)
• The IRS Scandal, Day 772 (June 20, 2015)
• The IRS Scandal, Day 771 (June 19, 2015)
• The IRS Scandal, Day 770 (June 18, 2015)
• The IRS Scandal, Day 769 (June 17, 2015)
• The IRS Scandal, Day 768 (June 16, 2015)
• The IRS Scandal, Day 767 (June 15, 2015)
• The IRS Scandal, Day 766 (June 14, 2015)
• The IRS Scandal, Day 765 (June 13, 2015)
• The IRS Scandal, Day 764 (June 12, 2015)
• The IRS Scandal, Day 763 (June 11, 2015)
• The IRS Scandal, Day 762 (June 10, 2015)
• The IRS Scandal, Day 761 (June 9, 2015)
• The IRS Scandal, Day 760 (June 8, 2015)
• The IRS Scandal, Day 759 (June 7, 2015)
• The IRS Scandal, Day 758 (June 6, 2015)
• The IRS Scandal, Day 757 (June 5, 2015)
• The IRS Scandal, Day 756 (June 4, 2015)
• The IRS Scandal, Day 755 (June 3, 2015)
• The IRS Scandal, Day 754 (June 2, 2015)
• The IRS Scandal, Day 753 (June 1, 2015)
• The IRS Scandal, Day 752 (May 31, 2015)
• The IRS Scandal, Day 751 (May 30, 2015)
• The IRS Scandal, Day 750 (May 29, 2015)
• The IRS Scandal, Day 749 (May 28, 2015)
• The IRS Scandal, Day 748 (May 27, 2015)
• The IRS Scandal, Day 747 (May 26, 2015)
• The IRS Scandal, Day 746 (May 25, 2015)
• The IRS Scandal, Day 745 (May 24, 2015)
• The IRS Scandal, Day 744 (May 23, 2015)
• The IRS Scandal, Day 743 (May 22, 2015)
• The IRS Scandal, Day 742 (May 21, 2015)
• The IRS Scandal, Day 741 (May 20, 2015)
• The IRS Scandal, Day 740 (May 19, 2015)
• The IRS Scandal, Day 739 (May 18, 2015)
• The IRS Scandal, Day 738 (May 17, 2015)
• The IRS Scandal, Day 737 (May 16, 2015)
• The IRS Scandal, Day 736 (May 15, 2015)
• The IRS Scandal, Day 735 (May 14, 2015)
• The IRS Scandal, Day 734 (May 13, 2015)
• The IRS Scandal, Day 733 (May 12, 2015)
• The IRS Scandal, Day 732 (May 11, 2015)
• The IRS Scandal, Day 731 (May 10, 2015)
• The IRS Scandal, Two Years And Counting (May 9, 2015)
• The IRS Scandal, Day 729 (May 8, 2015)
• The IRS Scandal, Day 728 (May 7, 2015)
• The IRS Scandal, Day 727 (May 6, 2015)
• The IRS Scandal, Day 726 (May 5, 2015)
• The IRS Scandal, Day 725 (May 4, 2015)
• The IRS Scandal, Day 724 (May 3, 2015)
• The IRS Scandal, Day 723 (May 2, 2015)
• The IRS Scandal, Day 722 (May 1, 2015)
• The IRS Scandal, Day 721 (Apr. 30, 2015)
• The IRS Scandal, Day 720 (Apr. 29, 2015)
• The IRS Scandal, Day 719 (Apr. 28, 2015)
• The IRS Scandal, Day 718 (Apr. 27, 2015)
• The IRS Scandal, Day 717 (Apr. 26, 2015)
• The IRS Scandal, Day 716 (Apr. 25, 2015)
• The IRS Scandal, Day 715 (Apr. 24, 2015)
• The IRS Scandal, Day 714 (Apr. 23, 2015)
• The IRS Scandal, Day 713 (Apr. 22, 2015)
• The IRS Scandal, Day 712 (Apr. 21, 2015)
• The IRS Scandal, Day 711 (Apr. 20, 2015)
• The IRS Scandal, Day 710 (Apr. 19, 2015)
• The IRS Scandal, Day 709 (Apr. 18, 2015)
• The IRS Scandal, Day 708 (Apr. 17, 2015)
• The IRS Scandal, Day 707 (Apr. 16, 2015)
• The IRS Scandal, Day 706 (Apr. 15, 2015)
• The IRS Scandal, Day 705 (Apr. 14, 2015)
• The IRS Scandal, Day 704 (Apr. 13, 2015)
• The IRS Scandal, Day 703 (Apr. 12, 2015)
• The IRS Scandal, Day 702 (Apr. 11, 2015)
• The IRS Scandal, Day 701 (Apr. 10, 2015)
• The IRS Scandal, Days 601-700 (Dec. 31, 2014 - April 9, 2015)
• The IRS Scandal, Days 501-600 (Sept. 22, 2014-Dec. 30, 2014)
• The IRS Scandal, Days 401-500 (June 14, 2014 - Sept. 21,2014)
• The IRS Scandal, Days 301-400 (Mar. 6, 2014 - June 13, 2014)
• The IRS Scandal, Days 201-300 (Nov. 26, 2013 - Mar. 5, 2014)
• The IRS Scandal, Days 101-200 (Aug. 18, 2013 - Nov. 25, 2013)
• The IRS Scandal, Days 1-100 (May 10, 2013 - Aug. 17, 2013)