WaPo: IRS apologizes for inappropriately targeting conservative political groups in 2012 election

[twa]

http://www.propublica.org/article/irs-office-that-targeted-tea-party-also-disclosed-confidential-docs

IRS Office That Targeted Tea Party Also Disclosed Confidential Docs From Conservative Groups

The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year.

any excuses now?

[Tulane Skins Fan]

Here's what I still don't understand about this whole thing. I think that political organizations are not tax exempt under 501©(4), and I think that now a lot of conservative groups are getting upset that they were targeted.

If they are tea party groups, aren't they political organizations that are inappropriately claiming tax exemptions?

[88Comrade2000]

Here's what I still don't understand about this whole thing. I think that political organizations are not tax exempt under 501©(4), and I think that now a lot of conservative groups are getting upset that they were targeted.

If they are tea party groups, aren't they political organizations that are inappropriately claiming tax exemptions?

Seems to me the government was actually doing their jobs. These groups were trying to get recognized as one thing to avoid taxes when it fact there were just political groups . Frankly, I think it's time to get rid of this tax exempt nonsense. Even charities need to pay; though for charities you would only tax then at 1% but they should still pay. Also, political campaigns and groups should pay taxes on the monies they raise and that should be taxed at a high rate.

[@DCGoldPants]

Frankly, I think it's time to get rid of this tax exempt nonsense. Even charities need to pay; though for charities you would only tax then at 1% but they should still pay. Also, political campaigns and groups should pay taxes on the monies they raise and that should be taxed at a high rate.

Preach on! If there is anything I've learned from all these different types of classifications over the past few days, its that they are built to be cheated on. Just like the whole system, things need to be simplified Do that, then you hopefully reduce whatever corruption is going on at the IRS, shrink their size, make doing taxes for everybody else, get rid of all the clever little ways people can cheat right now....and move on.

[Kilmer17]

Here's what I still don't understand about this whole thing. I think that political organizations are not tax exempt under 501©(4), and I think that now a lot of conservative groups are getting upset that they were targeted.

If they are tea party groups, aren't they political organizations that are inappropriately claiming tax exemptions?

I watched a bit of Lawrence O'Donnell last night and he talked about this. Apparently, the IRS is supposed to treat an entity as political if they exist ENTIRELY to be a political entity. But since the 50s, the IRS has been determining this based on whether politics is the PRIMARY focus. And as such, allows for interpretation.

It also never addresses what it means to be "political" does that mean candidate focused? Or issue focused? And of course, to what degree. The Sahara Club isnt a political organization in the classic sense, but I dont think anyone would disagree they support certain candidates who promote their cause.

Or better yet, on a local level, Im a member of a local civic group with 501C status. But we have a member who ran for office. And we all supported him. Does that mean we are a political organization?

[@DCGoldPants]

Or better yet, on a local level, Im a member of a local civic group with 501C status. But we have a member who ran for office. And we all supported him. Does that mean we are a political organization?

How did you support him?

I read something similar to what you saw on TV. The unwritten rules of the IRS 51/49 and all that to determine if somebody is political. What a crock of ****.

[Bang]

Good questions, K. I'd like to see some clarifications there as well.

when you say your organization all supported him, that could be as broad as actively campaigning, spending money on advertising, passing out fliers, organizing, or as quiet as simply endorsing him, or even as individuals privately voting for him.

~Bang

[Kilmer17]

Members gave money, the organization posted signs etc.

I think this whole IRS thing is very serious, but not some sort watergate like scandal.

Although is people arent held accountable (and by which I mean, not just fired) then I may change my mind.

---------- Post added May-15th-2013 at 02:35 PM ----------

Good questions, K. I'd like to see some clarifications there as well.

when you say your organization all supported him, that could be as broad as actively campaigning, spending money on advertising, passing out fliers, organizing, or as quiet as simply endorsing him, or even as individuals privately voting for him.

~Bang

Exactly. And if the IRS folks have the ultimate power to make the determination of what is and is not a political group, then that's a serious problem.

And if people dont think so, ask them this- Would you be okay if President Cheney was in the White House with the IRS holding such sway?

How fast would every Soros group get audited and closed?

[AsburySkinsFan]

Or better yet, on a local level, Im a member of a local civic group with 501C status. But we have a member who ran for office. And we all supported him. Does that mean we are a political organization?

Just as long as the primary work of the 501c is non-political then no it is not a political organization and is still eligible for tax exemption. However, once the primary purpose of the organization becomes political, like Tea Party groups would seem to indicate, then yes you lose your 501c status and tax exemption.

[Tulane Skins Fan]

I think the bottom line of this story might be "why do any of these groups get tax exempt status?"

[Kilmer17]

Just as long as the primary work of the 501c is non-political then no it is not a political organization and is still eligible for tax exemption. However, once the primary purpose of the organization becomes political, like Tea Party groups would seem to indicate, then yes you lose your 501c status and tax exemption.

And therein lies the problem with the word "primary".

1st, the IRS code (maybe code isnt the right word) originally states that the groups ENTIRE purpose is political. Only in practice has that word been changed to PRIMARY.

2nd- It allows for interpretation. So a left leaning person at IRS could say "well of course this tea party group is political" While a right leaning person could say the same about a pro gay marriage group.

I dont want either to be acceptable.

---------- Post added May-15th-2013 at 02:51 PM ----------

I think the bottom line of this story might be "why do any of these groups get tax exempt status?"

While a great point and something that should be addressed, it attempts to deflect the seriousness of this particular issue.

[AsburySkinsFan]

And therein lies the problem with the word "primary".

1st, the IRS code (maybe code isnt the right word) originally states that the groups ENTIRE purpose is political. Only in practice has that word been changed to PRIMARY.

2nd- It allows for interpretation. So a left leaning person at IRS could say "well of course this tea party group is political" While a right leaning person could say the same about a pro gay marriage group.

I dont want either to be acceptable.

I hear what you're saying, but what it is really there to prevent is an organization being granted a 501c tax status for say feeding the inner-city poor, and then retooling their efforts into an "Elect Candidate X" organization. We deal with this all the time in the church, sometimes we get involved in political issues, but the fact that we push for a certain legislation does not mean that our organization's primary purpose has changed. Will there be folks who push this in order to create a grey area? Sure, but is it pretty easy to determine what organizations are primarily about? Yes.

[Chants]

Okay, I'll bite, so if you call yourself "Southern Moonshiners Association" would you expect scrutiny from ATF? In the realm of the ATF's responsibility, what group would you red flag for further scrutiny.

I think it's incredibly naive to name your group "Taxed Enough Already" and not expect scrutiny on your tax activities. But that line of thinking seems par for the course.

The answer to your question has already been answered in Big Mama Rag, Inc. v. United States, 631 F. 2d 1030:

We are sympathetic with the IRS's attempt to safeguard the public fisc by closing revenue loopholes. And we by no means intend to suggest that tax-exempt status must be accorded to every organization claiming an educational mantle. Applications for tax exemption must be evaluated, however, on the basis of criteria capable of neutral application. The standards may not be so imprecise that they afford latitude to individual IRS officials to pass judgment on the content and quality of an applicant's views and goals and therefore to discriminate against those engaged in protected First Amendment activities.

So no, according to Big Mama Rag, the IRS can't discriminate against TEA party applicants simply for exercising the right to speak about lower taxes. Period.

[btfoom]

Has the IRS apologized for innapropriately targetting liberal groups as well?

Actually, just the opposite. According to a story in today's USA Today, the IRS approved liberal groups while Tea Party groups were held back:

http://www.usatoday.com/story/news/politics/2013/05/14/irs-tea-party-progressive-groups/2158831/

WASHINGTON -- In February 2010, the Champaign Tea Party in Illinois received approval of its tax-exempt status from the IRS in 90 days, no questions asked.

That was the month before the Internal Revenue Service started singling out Tea Party groups for special treatment. There wouldn't be another Tea Party application approved for 27 months.

In that time, the IRS approved perhaps dozens of applications from similar liberal and progressive groups, a USA TODAY review of IRS data shows.

STORY: IRS gave liberals a pass; Tea Party groups put on hold

As applications from conservative groups sat in limbo, groups with liberal-sounding names had their applications approved in as little as nine months. With names including words like "Progress" or "Progressive," the liberal groups applied for the same tax status and were engaged in the same kinds of activities as the conservative groups. They included:

• Bus for Progress, a New Jersey non-profit that uses a red, white and blue bus to "drive the progressive change." According to its website, its mission includes "support (for) progressive politicians with the courage to serve the people's interests and make tough choices." It got an IRS approval as a social welfare group in April 2011.

• Missourians Organizing for Reform and Empowerment says it fights against corporate welfare and for increasing the minimum wage. "It would be fair to say we're on the progressive end of the spectrum," said executive director Jeff Ordower. He said the group got tax-exempt status in September 2011 in just nine months after "a pretty simple, straightforward process."

• Progress Florida, granted tax-exempt status in January 2011, is lobbying the Florida Legislature to expand Medicaid under a provision of the Affordable Care Act, one of President Obama's signature accomplishments. The group did not return phone calls. "We're busy fighting to build a more progressive Florida and cannot take your call right now," the group's voice mail said.

Like the Tea Party groups, the liberal groups sought recognition as social welfare groups under Section 501©(4) of the tax code, based on activities like "citizen participation" or "voter education and registration." <rest at link>

[AsburySkinsFan]

The answer to your question has already been answered in Big Mama Rag, Inc. v. United States, 631 F. 2d 1030:

So no, according to Big Mama Rag, the IRS can't discriminate against TEA party applicants simply for exercising the right to speak about lower taxes. Period.

You're right, they can't discriminate against them for simply exercising their right to speak about lower taxes, however they can discriminate against them because they are primarily a political group and therefore not eligible for 501c tax exempt status. The IRS is not allowed to judge for or against them based on the content of their view, instead the judgment is based on their political activity and purpose of their organization.

As such a Tea Party organization in their application for tax exemption cannot be discriminated against because they affirm Tea Party principles, however they can be discriminated against if their primary purpose is political.

[Larry]

They're claiming to know the IRS control #. We don't need to speculate. It's either an accurate control number or it's not. If it's not, the IRS could prove it. If it is, there's illegal leaking of private docs directly to the Obama campaign going on here.

You have absolutely nothing other than your fervent hopes upon which to base that highlighted claim.

---------- Post added May-15th-2013 at 03:19 PM ----------

http://www.propublica.org/article/irs-office-that-targeted-tea-party-also-disclosed-confidential-docs

IRS Office That Targeted Tea Party Also Disclosed Confidential Docs From Conservative Groups

The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year.

any excuses now?

So, the complaint is:

1. ProPublica requested (through FOIA? I got no clue how somebody can request somebody else's tax data) data on numerous groups.
   
2. The IRS complied with (some of) their requests.
   
3. ProPublica publishes (some of) the data they got.
   
4. ProPublica (and twa) now attack the IRS as proof of conspiracy, because they shouldn't have complied with the requests.

---------- Post added May-15th-2013 at 03:28 PM ----------

Here's what I still don't understand about this whole thing. I think that political organizations are not tax exempt under 501©(4), and I think that now a lot of conservative groups are getting upset that they were targeted.

If they are tea party groups, aren't they political organizations that are inappropriately claiming tax exemptions?

Seems to me the government was actually doing their jobs. These groups were trying to get recognized as one thing to avoid taxes when it fact there were just political groups .

It's already been pointed out several times, in this thread. (By me. With links to the supporting information.)

1) 501c4 organizations are allowed to engage in things that we English speakers call political. They can advocate for issues or positions. They can lobby. They just can't engage in what the law calls "political operations": Which refers to actually campaigning for or against individual candidates. (And parts of the law actually say that they can even do that. They just have to pay some taxes, if they do.)

I haven't checked, but I strongly suspect that the NRA os a 501c4 organization. They can advocate all they want for a law that requires every American to carry a six shooter whenever they're in Texas, and they're still a perfectly valid 501c4 organization. (If they run TV commercials telling people to vote for Senator Lardbutt, then they might have a problem.)

2) And there's another tax exemption category, for political parties and PACs. 527 organizations are required to campaign for individual candidates. (If they don't, then they aren't 527 organizations.)

They're tax exempt, too. But, they have to comply with campaign finance laws.

[twa]

They have a Sahara club now?

I'd be fine eliminating/taxing everyone equally.....it would spark tax reform like nothing else

add

Larry the info on pending groups is private and not to be disclosed by the IRS anymore than your tax return....ProPublica understands that

[Larry]

Exactly. And if the IRS folks have the ultimate power to make the determination of what is and is not a political group, then that's a serious problem.

And if people dont think so, ask them this- Would you be okay if President Cheney was in the White House with the IRS holding such sway?

How fast would every Soros group get audited and closed?

Somebody, a few days back, PM'd me a pdf of some law school paper that was complaining about the definition of "political", in the tax code.

What it said was, when the courts look at a law, to determine what it means, they supposedly have a heirarchy they follow:

1) They look at what the law says.

2) If that isn't clear, they look at other, nearby law, to see what the term means

3) If that isn't clear, they look at the Congressional debate on the law, to see what Congress thought it said.

4) If that isn't clear, they look at precedent or common law. (Including any administrative procedures or rules, adopted by the Executive, in the course of implementing the law.)

The paper says that the law does not in any way define "political operations". Not in the actual law, or any nearby law. That the clause was introduced on the floor of the House, not in committee, so there wasn't any debate to define the clause. And, it says, the IRS really hasn't created any real rules, in the decades that the law has been on the books.

[AsburySkinsFan]

The paper says that the law does not in any way define "political operations". Not in the actual law, or any nearby law. That the clause was introduced on the floor of the House, not in committee, so there wasn't any debate to define the clause. And, it says, the IRS really hasn't created any real rules, in the decades that the law has been on the books.

[Larry]

Just as long as the primary work of the 501c is non-political then no it is not a political organization and is still eligible for tax exemption. However, once the primary purpose of the organization becomes political, like Tea Party groups would seem to indicate, then yes you lose your 501c status and tax exemption.

Should the NRA, ACLU, or AARP be tax exempt?

How about the various political parties?

(Any body else who wants to, is also invited to respond to these questions.)

---------- Post added May-15th-2013 at 04:07 PM ----------

I hear what you're saying, but what it is really there to prevent is an organization being granted a 501c tax status for say feeding the inner-city poor, and then retooling their efforts into an "Elect Candidate X" organization. We deal with this all the time in the church, sometimes we get involved in political issues, but the fact that we push for a certain legislation does not mean that our organization's primary purpose has changed. Will there be folks who push this in order to create a grey area? Sure, but is it pretty easy to determine what organizations are primarily about? Yes.

Actually, as I understand it, there are some rules for that situation.

Apparently, at least part of the law says that if a 501c4 organization does engage directly in campaigning for a candidate, then whatever money they spend on that candidates is taxable. (And, one source I've read says that the IRS has the authority to treat such spending as taxable, for the year before it was spent, as a punishment.)

[AsburySkinsFan]

Should the NRA, ACLU, or AARP be tax exempt?

Are the majority of their efforts political?

I think a case can be made that the primary focus of the NRA is political, maybe not when they first were founded but now...yes.

How about the various political parties?

A political party being tax exempt seems to be contradictory to me.

---------- Post added May-15th-2013 at 04:09 PM ----------

Actually, as I understand it, there are some rules for that situation.

Apparently, at least part of the law says that if a 501c4 organization does engage directly in campaigning for a candidate, then whatever money they spend on that candidates is taxable. (And, one source I've read says that the IRS has the authority to treat such spending as taxable, for the year before it was spent, as a punishment.)

That may well be, I personally don't know. Either way it is irrelevant to this discussion because the issue at hand are new applications for tax exemption and not 501c review.

[Larry]

Larry the info on pending groups is private and not to be disclosed by the IRS anymore than your tax return....ProPublica understands that

And requested it, received it, and printed it.

And now they (and you) want to claim that this is somehow proof of a conspiracy.

Is ProPublica also attacking themselves, for being part of this conspiracy?

[JimboDaMan]

Seems to me the government was actually doing their jobs. These groups were trying to get recognized as one thing to avoid taxes when it fact there were just political groups . Frankly, I think it's time to get rid of this tax exempt nonsense. Even charities need to pay; though for charities you would only tax then at 1% but they should still pay. Also, political campaigns and groups should pay taxes on the monies they raise and that should be taxed at a high rate.

I'm with you there. Nobody was ever stopped or hindered from performing any activity. The problem is when these avowedly political organizations want tax breaks for their activities. Get rid of the tax breaks and we get rid of this problem altogether. No more bending the rules until they scream, just do whatever you do without being unduly influenced by tax policy.

---------- Post added May-15th-2013 at 04:14 PM ----------

Has the IRS apologized for innapropriately targetting liberal groups as well?

No, apparently the other three quarters of the groups getting this scrutiny have not been squealing like a stuck pig yet.

[Larry]

Are the majority of their efforts political?

I think a case can be made that the primary focus of the NRA is political, maybe not when they first were founded but now...yes.

Define "political".

The tax code apparently has a definition. (Campaigning for, or against, particular, individual, candidates.) But that's considerably narrower than what people think of, when they say political.

Is educating people about the threat of global warming political?

Trying to teach people not to hate gays?

Trying to get people to become Vegan?

A political party being tax exempt seems to be contradictory to me.

And I can understand that feeling. But Congress seems to disagree with you. (Big shock, huh? "All in favor of making both the Republican and Democratic Parties exempt from taxes, please say Aye.")

The 527 tax rules were specifically created for the purpose of making political parties tax exempt.

(But, I can see the logic of saying they shouldn't be.)

----------

Dumb idea:

As I understand it, businesses are taxed on their profit, not their income.

As such, do we really need special tax exemptions for non-profit organizations? Seems to me that, if the Salvation Army, or the NRA, or the GOP, don't make a profit, then they're already exempt from taxes, because the tax on zero is zero.

Seems, to me, like the only time they need special tax exemption laws, is if they're making a profit.

----------

My next question:

Should lobbying be deductible, as a business expense? Or should it be considered as "money that a business spent, out of it's profit"?

Seems, to me, that if everybody who did lobbying, had to pay taxes on their money, and then pay the lobbyist out of what's left, after taxes, then there might be a lot less corporate lobbying.

Just a thought.

[AsburySkinsFan]

Thanks Larry...I'm gonna go play in the street now.