More on the IRS

IRS and the Tea Party

Let’s take our time and look at this IRS scandal once again. Basically, the IRS singled out groups that included “tea party” or “patriot” in their names for extra scrutiny. Does this make sense? If we can avoid hyperbole and exaggeration for just one second, why should a political organization apply for tax-exempt status from the IRS? Oh, and as we’re examining this, let’s remember that the TEA in tea party stands for Taxed Enough Already.

When we think about organizations that apply for tax-exempt status, what comes to mind? The Red Cross. United Way. Boys and Girls Club of America.

From the IRS:

If your organization is not organized for profit and will be operated only to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). The discussion that follows describes the information you must provide when applying. For application procedures, see chapter 1.

To qualify for exemption under section 501(c)(4), the organization’s net earnings must be devoted only to charitable, educational, or recreational purposes. In addition, no part of the organization’s net earnings can inure to the benefit of any private shareholder or individual. If the organization provides an excess benefit to certain persons, an excise tax may be imposed. See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax.
Examples.   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies.

So, you are working in the Cincinnati office of the IRS. You specifically work on nonprofit organizations that are organized to promote social welfare in order to benefit the community. You get an application from a group that is affiliated with the tea party. Are you going to think that this group is a political organization or a social organization like a volunteer fire department?

More from McClatchy News:

The IRS late Wednesday released the names of 176 applications it had approved through May 9 in its controversial specialized review process. That process is at the heart of the controversy since specialists were flagging applications that had tea party, patriot and other politically charged conservative names.

The 176 approved applications include dozens of tea party groups, as well as others with innocuous names such as Charlotte Matters, Kentucky 912 Project and Miami-Dade Taxpayers Alliance. Some appear overtly political, such as the Coalition for a Conservative Majority, both the Denver and Colorado Springs chapters, and Progressives United Inc.

All were applying for a tax-exempt designation under section 501 (c) of the tax code. This section has at least 25 tax-exempt designations, and the tea party groups were applying under a provision – 501 (c) 4 – that would treat them as social welfare organizations. This allows the groups to raise money from donors and get involved in politics, as long as that’s not their primary activity. Importantly, the donors are not disclosed publicly.

Among the existing 501 (c) 4 organizations are giant election-influencing political entities such as Crossroads GPS and Americans for Prosperity on the right, and the pro-Obama Organizing for America and Priorities USA on the left.

So now, armed with facts and data about this IRS scandal, does this increased scrutiny seem to be right or wrong? These are political organizations. Whether these organizations represent the tea party, the progressive movement or whatever, they are political organizations. Let’s not pretend that they aren’t. As such, none of these political organizations should be allowed to apply for “charity” or tax-exempt status. It is simply wrong. It is simply robbing the United States of tax revenue. Revenue that we could easily used to, I don’t know, balance the budget, pay for Head Start, build more schools, pay policemen and firefighters what they really deserve, repair bridges and build more roads. These are just a few of the things that I can think of off the top my head. So, where’s the real scandal?


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Errington C. Thompson, MD

Dr. Thompson is a surgeon, scholar, full-time sports fan and part-time political activist. He is active in a number of community projects and initiatives. Through medicine, he strives to improve the physical health of all he treats.


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