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View Diary: House Republicans want to sic IRS on AARP (102 comments)

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  •  The loophole is IRS Sec 501(c)(3) lobbying rules (1+ / 0-)
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    Ohiodem1

    IRS form 990sc is used to report ALEC's non-profit activities.
    The loophole is encoded in IRS regulations that defines exceptions to what constitutes lobbying activities for non-profits that claim to be educational in nature. To maintain tax-exempt status, some lobbying is permitted, but it must not be "substantial" and it must be non-partisan. Page 2 of the instructions for form 990 describes the loopholes under Exceptions to lobbying and Exceptions to lobbying. Basically, they can respond to "technical questions" from any governmental agencies. The response can consist of anything including, perhaps, a complete customized legislative bill ready for a vote. This isn't lobbying activity. They can't charge for this because that would be a bribe. They have plenty of tax-free donations from Koch et al to cover the cost. The loophole is that wide.

    The crack in their armor is that their activity is clearly partisan and their lobbying activities are probably claimed as educational activities. Unless we can provide rock-solid evidence of deliberate and repeated violations of these restrictions, the IRS won't pursue.ALEC. The penalty is likely to end up being a fine and a slap on the wrist telling them to clean up their act.

    This isn't what needs to happen. These guys need to got to prison is possible and the whole industry needs to be abolished or regulated with on-site federal auditors,

    Attacking ALEC isn't feasible. Attacking the legislators individually is feasible. But their behavior is legal. Proposing changes to the IRS or state regulations to prohibit this activity is not going anywhere, either. Attacking the connections where the money flows is feasible, but the money is laundered in layers and nearly impossible to track.

    My approach is to investigate the legislators individually for other crimes, preferably unrelated. A dirty politician is dirty in other aspects of their lives. A blindsided surprise gets them out of office faster than anything. Crimes can be exposed with effort and persistence. This can be done using legal and ethical means. I know. Been there.

    Once the crooks are out of the way, legislation can be introduced to eliminate the lobbying loopholes.

    "All people are born alike - except Republicans and Democrats" - Groucho Marx

    by GrumpyOldGeek on Sat Apr 02, 2011 at 04:32:28 PM PDT

    [ Parent ]

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