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View Diary: Groups targeted by IRS pushed political activity boundaries (135 comments)

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  •  The scandal is nonpartisan (47+ / 0-)

    The real scandal is that any of these groups was ever given 501(c)(4) status in the first place.  From the Chiggertown Tea Party to Priorities USA and Crossroads, all of them should be paying taxes on their income and disclosing their donors.  

    Some lawmakers have taken up Lawrence O'Donnell's cause and tried to get the IRS to restore its interpretation to the "exclusively" social welfare activities requirement in the statute.  If that succeeds, this will be the best scandal to ever come down the pike.

    If you want to cut Social Security, you're not a real Democrat.

    by Dallasdoc on Tue May 28, 2013 at 01:28:01 PM PDT

    [ Parent ]

    •  NAACP v Alabama (1958) (9+ / 0-)
      It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as the forms of governmental action in the cases above were thought likely to produce upon the particular constitutional rights there involved. This Court has recognized the vital relationship between freedom to associate and privacy in one's associations. When referring to the varied forms of governmental action which might interfere with freedom of assembly, it said in American Communications Assn. v. Douds, supra, at 402:

      A requirement that adherents of particular religious faiths or political parties wear identifying armbands, for example, is obviously of this nature.

      Compelled disclosure of membership in an organization engaged in advocacy of particular beliefs is of the same order. Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs.

      •  Other than fact that their members walk upright (12+ / 0-)

        what other features do NAACP and teabaggers have in common?  Besides, in the case at issue (to which you provide no link), the NAACP was merely seeking the ability to conduct business in AL.  Unlike these organizations, it wasn't seeking a tax break.

        In an era when the Klan and the White Citizens' Councils both thrived, NAACP members in AL in 1958 faced threats to their physical safety and/or their chance to earn a livelihood.  Nobody's going to burn a cross in the yard of a teabagger, nor are they going to terminate their employment or cut off their credit.

        This comparison isn't apples v. oranges, it's apples v. turnips.

        Some men see things as they are and ask why. I dream of things that never were and ask why not?

        by RFK Lives on Tue May 28, 2013 at 02:11:19 PM PDT

        [ Parent ]

        •  So ... (1+ / 0-)
          Recommended by:
          VClib

          ... no one has anything to fear regarding public disclosure of advocacy spending? I'll call Scott Eckern and let him know.

          I'm glad you have a job in which you can spend your ideological dollars without consequence.

          •  Which teabaggers lost their jobs? (14+ / 0-)

            Better yet, which teabaggers had men in hoods carrying torches show up on their front lawns around midnight?

            MLK's house was bombed in Montgomery 2 years before this decision was rendered.  Freedom riders were beaten in Montgomery 3 years after the decision. A Birmingham church was bombed, killing 4 girls, 2 years after that.  

            Your attempt to analogize purported risks faced by teabaggers to real risks faced by civil rights activists is hard to swallow.  Your failure to address a key legal point (NAACP seeking to simply do business while teabaggers sought--and obtained--tax breaks) makes your argument even less tenable.

            Some men see things as they are and ask why. I dream of things that never were and ask why not?

            by RFK Lives on Tue May 28, 2013 at 02:40:04 PM PDT

            [ Parent ]

            •  Obviously, the NAACP faced worse threats. (3+ / 0-)
              Recommended by:
              TX Unmuzzled, VClib, kaliope

              But the principle is the same: government shouldn't be peering into the records of private groups without good cause.

              And, by the way, the NAACP was and is a tax-exempt organization and the business it wished to transact in Alabama was its exempt advocacy business. Duh.

              •  Where does opinion mention NAACP tax break ? (4+ / 0-)

                This paragraph indicates that the tax status of the NAACP was not an issue:

                Alabama has a statute, similar to those of many other States, which requires a foreign corporation, except as exempted, to qualify before doing business by filing its corporate charter with the Secretary of State and designating a place of business and an agent to receive service of process. The statute imposes a fine on a corporation transacting intrastate business before qualifying, and provides for criminal prosecution of officers of such a corporation. Ala.Code, 1940, Tit. 10, §§ 192-198. The National Association for the Advancement of Colored People is a nonprofit membership corporation organized under the laws of New York. Its purposes, fostered on a nationwide basis, are those indicated by its name, * and it operates
                Page 357 U. S. 452
                through chartered affiliates which are independent unincorporated associations, with membership therein equivalent to membership in petitioner. The first Alabama affiliates were chartered in 1918. Since that time, the aims of the Association have been advanced through activities of its affiliates, and, in 1951, the Association itself opened a regional office in Alabama, at which it employed two supervisory persons and one clerical worker. The Association has never complied with the qualification statute, from which it considered itself exempt.

                In 1956, the Attorney General of Alabama brought an equity suit in the State Circuit Court, Montgomery County, to enjoin the Association from conducting further activities within, and to oust it from, the State. Among other things, the bill in equity alleged that the Association had opened a regional office and had organized various affiliates in Alabama; had recruited members and solicited contributions within the State; had given financial support and furnished legal assistance to Negro students seeking admission to the state university, and had supported a Negro boycott of the bus lines in Montgomery to compel the seating of passengers without regard to race. The bill recited that the Association, by continuing to do business in Alabama without complying with the qualification statute, was
                ". . . causing irreparable injury to the property and civil rights of the residents and citizens of the State of Alabama for which criminal prosecution and civil actions at law afford no adequate relief. . . ."

                The IRS wanted to know whether teabaggers are advocacy organizations (which many of them clearly are) that are not entitled to tax exemptions.  The AL AG was making no such inquiry.  Facile analogies coupled w/ personal insult really add little to this discussion.

                Some men see things as they are and ask why. I dream of things that never were and ask why not?

                by RFK Lives on Tue May 28, 2013 at 03:39:36 PM PDT

                [ Parent ]

                •  You're not making sense (1+ / 0-)
                  Recommended by:
                  VClib

                  Advocacy organizations are entitled to tax exemptions under 501c4 unless electoral advocacy is their primary purpose.

                  What is the governmental interest served by making all contributors to Human Rights Campaign public?

                  •  Perhaps you might re-read the diary above (5+ / 0-)

                    Let's start at the beginning w/ relevant excerpts from a superb diary:

                    When CVFC, a conservative veterans’ group in California, applied for tax-exempt status with the Internal Revenue Service, its biggest expenditure that year was several thousand dollars in radio ads backing a Republican candidate for Congress.

                    The Wetumpka Tea Party, from Alabama, sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama” while the I.R.S. was weighing its application.

                    And the head of the Ohio Liberty Coalition, whose application languished with the I.R.S. for more than two years, sent out e-mails to members about Mitt Romney campaign events and organized members to distribute Mr. Romney’s presidential campaign literature.

                    Perhaps you feel differently, but there are at least 3 such organizations expressly cited by the diarist that one just might argue have electoral advocacy as their primary purpose.  In my experience, at least, lit drops and radio ads for candidates constitute such advocacy.

                    Your original comment analogized CVFC, the Wetumpka Tea Party, and the OH Liberty Coalition to the NAACP.  I responded by noting that the only thing that the 3 former groups have in common w/ the latter group is that all of their members walk upright.  You've never posted anything that rebuts my response.

                    Some men see things as they are and ask why. I dream of things that never were and ask why not?

                    by RFK Lives on Tue May 28, 2013 at 04:17:21 PM PDT

                    [ Parent ]

                  •  Adam B, WRONG. You don't know the LAW. (1+ / 0-)
                    Recommended by:
                    doroma

                    The law has been cited to you repeatedly.  Please pay attention:

                    [/quote](4)
                    (A) 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.
                    (B) Subparagraph (A) shall not apply to an entity unless no part of the net earnings of such entity inures to the benefit of any private shareholder or individual.[/quote]

                    Advocacy organizations are not entitled to tax exemptions under 501c4 unless they are operated exclusively for the promosion of social welfare.  EXCLUSIVELY.

                    The IRS regulations from the 1950s are another matter -- but the IRS regulations are illegal, because they convert "exclusively" into "primarily".

                    The IRS does not have the right to rewrite the law by regulation.

                    I ask again, who has standing to sue to overturn the illegal regulations from the 1950s?  

                    Really, we all ought to have standing, but the courts have repeatedly decided that diffuse harm to all of us doesn't give anyone standing.

              •  OK, Adam B, but shouldn't we be looking to RICO (0+ / 0-)

                for some relief? Just an inquiry.

          •  Seems sorta right (2+ / 0-)
            Recommended by:
            doroma, RFK Lives

            Sure you have the right to support any cause you like, but when your cause happens to fly in the face of a large portion of the people you work with or work with you in your industry, you also have the right to be held to public scrutiny for that support. If my campaign donations are public, than why shouldn't my donations to an overtly political 501c be?

      •  How are their rights curtailed by denial of 501c4? (5+ / 0-)

        If political groups are forced to disclose their donors to the FEC or other public entities (as they are, I believe), then there is no unreasonable constraint on their participation in similar groups if tax-advantaged status is denied.  What public good is served by mammoth political donors hiding in the shadows?  

        The statutory language requiring that these groups be exclusively engaged in social welfare pursuits has been widely broadcast lately.  Political advocacy was not traditionally understood to be covered by that language, and no change in the statute has opened it up to their pursuits, to my knowledge.  I'd be happy to be corrected if I'm wrong, however.

        These groups are not objecting on the basis of restraint of speech.  They are asking for tax-advantaged status.  Anonymity of their donors is consequent to that privilege, is it not?  So if they don't qualify for the tax-advantaged status, why should they expect the other benefits of that status?

        If you want to cut Social Security, you're not a real Democrat.

        by Dallasdoc on Tue May 28, 2013 at 03:41:35 PM PDT

        [ Parent ]

        •  Because these aren't primarily electoral groups. (0+ / 0-)

          I don't understand why compelled production of contribution lists should be the norm and not the exception.

          •  They're not exclusively social welfare groups (0+ / 0-)

            ... and so should not be eligible for tax-exempt status.  If they paid taxes on their donations I'd be happy, but if losing out on 501c4 status made them disclose their donors, as several commentators have asserted, I'd be a lot happier.

            If you want to make a case that they shouldn't have to disclose their donors, that doesn't argue that they should be granted tax-advantaged status.  Make a different argument.

            If you want to cut Social Security, you're not a real Democrat.

            by Dallasdoc on Tue May 28, 2013 at 04:25:28 PM PDT

            [ Parent ]

          •  Now you're making assumptions... (0+ / 0-)

            about what these groups do. Given the evidence cited above, they sure do look a lot like they are primarily engaged in political and electioneering activity, which would be exactly the thing that should bar them from 501(c)(4) status. If they'd care to submit an application for 527 status (as an independent expenditure organization, no doubt), then more power to them; they'll still be tax exempt but they'll have to follow the same electioneering rules as everybody else. If they're going to act as a political organization, then they don't get to keep the sources of their money hidden.

            If this evidence turns out to be misleading and they really are engaged primarily in social welfare and advocacy work, then let them do what every other group seeking virtually any tax exempt status has to do: cough up the data to prove to the IRS that you are qualified for what you're asking for. It's really as simple as that. If they are social welfare organizations, then they'll get the status and can keep their donors secret all they like.

            You have to remember that the worst of the 501(c)(4) groups have already found the dodge that lets them get around the whole thing anyway, it's just that these small-time Teaparty groups didn't know the trick (though they could have found out if they'd asked one of the Republican old hands at 501(c)(4)s like James Bopp.) Some of the worst of these groups have formed, applied for 501(c)(4) status, run blatant electioneering campaigns, and then folded the group, all within about six months. The IRS can't even keep up with that kind of flash-corporation; by the time they might refuse the status and demand that the group pay taxes, it no longer exists and (as a defunct corporation without assets) is essentially untouchable. If the donor records were never kept (or "no longer exist") then they've gotten away scot-free with bypassing both election finance and tax law. These Teaparty types seem to have learned how to abuse 501(c)(4)s but not how to keep themselves covered while they did so.

            Strategy without tactics is the slowest route to victory, tactics without strategy is the noise before defeat. Sun Tzu The Art of War

            by Stwriley on Wed May 29, 2013 at 06:58:51 AM PDT

            [ Parent ]

      •  But why should they be exempt from taxation? (1+ / 0-)
        Recommended by:
        eglantine

        Why should the group be especially exempt from taxation if the rule for getting the exemption is that they do disclose?

      •  Rather beside the point, isn't it? (0+ / 0-)

        The freedom of association is not what's at issue here, nor has it ever been. The IRS has no interest in a group's membership beyond what is necessary for determining tax status, regardless of what status a group has or seeks, and was not seeking to make this public or otherwise impair the ability to associate in any way. So I fail to see why this is even relevant.

        The determination of tax status in this case was exactly what the IRS was supposed to be doing by law. It is a matter of what kind of activities the group can engage in and obtain (or retain) that tax status, not anything else. The IRS has no power or desire (as an organization) to prevent any group from associating as they wish or advocating for whatever they wish; they do have the power to refuse to grant the same group a tax status that they do not, by law, qualify for. As long as that law is being generally and equally applied to all who seek that tax status, then the issues raised in American Communications Assn. v. Douds don't don't even come up.

        Strategy without tactics is the slowest route to victory, tactics without strategy is the noise before defeat. Sun Tzu The Art of War

        by Stwriley on Wed May 29, 2013 at 06:33:19 AM PDT

        [ Parent ]

    •  or that new guidelines for c4's weren't developed (8+ / 0-)

      after the Citizen's United ruling.   Both parties wanted to take advantage of the ruling and press c4 status to the limits. But, surprise, surprise, it was the Dems and the IRS who got burned by the GOP.  

      Unless the WH gets a sensible grip on this issue, the GOP will do it again.  Remember when they accused Clinton & Gore (Kerry, too, IIRC)  of raising campaign cash from China?  

      Like it or no, Obama needs to issue some new post Citizens United guidelines for the c4's and political activity.   Will he catch some GOP flak?  Sure, but he's so good at PR, he can overcome it.

      "If you can't take their money, eat their food, drink their booze and then vote against them, you have no business being up there."

      by Betty Pinson on Tue May 28, 2013 at 02:03:05 PM PDT

      [ Parent ]

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