Paul L. Caron
Dean



Thursday, July 7, 2016

DNC Lacks 501(c)(3) Exemption For Philadelphia Convention, Putting Donors' Charitable Deductions At Risk

DNCFollowing up on my previous post:  Philadelphia Inquirer, With DNC Just Weeks Away, Host Committee Still Waiting for Green Light From IRS:

The local fund-raising committee for the Democratic National Convention still has not received tax-exempt status from the IRS, and that could affect donors who want tax deductions.

The Philadelphia 2016 Host Committee, which is responsible for raising at least $60 million for the July 25 to 28 convention at the Wells Fargo Center, has not received the designation under section 501(c)3 of the tax code.

The committee is trying to close a funding gap of at least $4 million less than four weeks before the start of the convention. It applied for tax-exempt charity status in May 2015.

"A year is extraordinary," said Marcus Owens, a Washington tax lawyer who ran the IRS tax-exempt organizations division for a decade. He said the 501(c)3 application process typically takes three months. "That tells me the IRS has issues with it of some sort," Owens said. "Or the IRS is internally struggling with the political aura of the convention."

By contrast, Cleveland's host committee for the July 18 to 21 Republican convention received 501(c)3 status in August 2014, soon after it applied.

Philadelphia Inquirer, DNC Donors Beware: You Might Not Get That Tax Deduction:

DNC donors beware.

The fundraising committee for the Democratic National Convention has not yet received its tax-exempt designation by the Internal Revenue Service. That means that donors, both individuals and corporations, who were counting on deducting their contributions from their taxes could be in for a costly gift. ...

"In the event that the Host Committee were not to be recognized as exempt under section 501(c)(3), the Host Committee would take the necessary steps to convert into a 501(c)(6) organization,"Anna Adams-Sarthou, host committee spokeswoman, said Thursday. A 501(c)6 organization is a tax-exempt designation for "business leagues." According to the IRS, donors to such organizations can claim tax deductions if their contributions are "ordi­nary and necessary in the conduct of the taxpayer’s business."

https://taxprof.typepad.com/taxprof_blog/2016/07/dnc-lacks-501c3-exemption-for-philadelphia-convention-putting-donors-charitable-deductions-at-risk.html

Political News, Tax | Permalink

Comments

Why is the IRS slow-walking this application? This is outrageous. Why is the MSM not covering this?!?!?! Chairman Chaffetz should be scheduling hearings!!!

Posted by: Publius Novus | Jul 7, 2016 6:32:37 AM

I don't understand how either political party can qualify for 501(c)(3) status. A political convention is not about voter education, it is the exercise of political power! This should not be tax deductible for either party.

Posted by: J B Gust | Jul 7, 2016 7:21:36 AM

Democrats? These troubles could no be happening to a more deserving bunch.

It may also reflect on the competence each party displays with handling money. I may whine that Republicans often sound like accountants, but at times that proves useful.

Posted by: Michael W. Perry | Jul 7, 2016 8:38:01 AM

The delay probably just means that the IRS has been starved for funds, on purpose, by Congress and so, is understaffed and unable to keep up with the demands it faces.

Posted by: Cindy | Jul 10, 2016 11:44:59 AM

The delay is probably due to the funding cuts by Congress. The reason that Chaffetz won't schedule hearings is that he is probably somehow associated with it...

Posted by: sw | Jul 12, 2016 5:44:00 AM