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View Diary: Abbreviated Pundit Round-up: The Village, the tempests, the teapots (99 comments)

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  •  Pearlstein parrots a lie. (0+ / 0-)

    501(c)(4)  is not 501(c)(3)

    501(c)(4) is allowed to be overtly political in nature.
    It is completely within the idea of social welfare as used within the law to call for lower taxes, more taxes, more drilling, no drilling, etc.

    It is even completely legal to work directly on behalf of political candidates -- overtly and openly -- so long as that is not the primary purpose of the organisation.

    The IRS uses a yardstick of 20% for determining how much of a groups resources/effort can go directly to supporting campaigns without violating the "primary" rule. It's arbitrary, but let's look at it this way:

    In a given year, an organisation could spend 10.5 weeks doing nothing whatsoever except to get out on the campaign trail for candidates it believed further its goals.

     

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Thu May 16, 2013 at 09:19:38 AM PDT

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    •  Not by statute, they aren't. (0+ / 0-)

      According to the actual statute, which should govern over the IRS's clearly erroneous interpretation, the only organizations entitled to tax-exempt organizations under 26 U.S.C. § 501(c)(4) are:

      Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
      The statute itself leaves no room whatsoever for anything other than "the promotion of social welfare."  The IRS has simply written the word "exclusively" out of an otherwise clear statute.

      "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

      by FogCityJohn on Thu May 16, 2013 at 12:46:25 PM PDT

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      •  And what, exactly, do you think social welfare is? (0+ / 0-)

        For that matter, what do you think the

        promotion of social welfare
        is?

        Don't forget that we are in a post Citizens United world.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Thu May 16, 2013 at 01:47:15 PM PDT

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        •  indeed (0+ / 0-)

          Norm Ornstein, no democrat, deals out more reality:

          If the IRS or the White House were intent on going after Republicans and conservatives who were using 501(c)4 status to influence elections, why would they leave American Crossroads GPS and the American Action Network alone, each organizations that made no bones about their use of the status simply to hide their donors? The idea that these organizations had or have anything to do with "social welfare" is almost farcical, and that is why every major campaign finance reform group and many others pushed the IRS hard to apply its own regulations to them and other groups-- now including the Obama campaign adjunct Organizing for America-- not because of their political coloration but because they openly flouted the intent and clear language of the law and were ignored by a complacent and disorganized IRS, one that at its leadership level was probably cowed by the likelihood that doing its job against these organizations would be met by fierce criticism from Mitch McConnell, the Wall Street Journal editorial page and many others.

          The IRS brass, from its Bush-appointed head on down to its top career officials like Lois Lerner, wanted no part of a major political fight that would get the agency caught in a partisan crossfire, and so put their collective heads in the sand about the real abuses of the tax law going on around them.

          The problem is the nature of 501c4 [and a post CU world], not the IRS.

          "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

          by Greg Dworkin on Thu May 16, 2013 at 02:37:42 PM PDT

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        •  It clearly isn't engaging in politics. (0+ / 0-)

          And that's true even by the IRS's definition.  If a group is devoted "primarily" to political activity, then it doesn't qualify for tax-exempt status under § 501(c)(4).  So political activity and the "promotion of social welfare" are quite plainly not the same thing.

          In any event, my original point remains.  No organization that engages in political activity should qualify for tax-exempt status under the plain language of the statute as written by Congress.  The fact that the IRS grants that status to organizations that engage in very substantial political activity just shows that the agency is ignoring the statute.  In fact, it's aware of the inconsistency between the language of the law and its regulatory interpretation.  

          This is exactly why CREW has filed a rulemaking petition asking the IRS to correct its regulations to conform to the statute.

          "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

          by FogCityJohn on Thu May 16, 2013 at 03:37:56 PM PDT

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