House Republicans swiftly announce hearing on IRS targeting conservative groups

[TomCADem]

Source: Fox News

The IRS acknowledging that it targeted conservative political groups during the 2012 election season has sparked bipartisan calls for investigation -- with House Republicans already saying they will hold a hearing on the issue.

House Majority Leader Eric Cantor said Friday the Republican-led chamber would investigate the tax-collecting agency for flagging the groups for additional review to see whether they were violating their tax-exempt status.

“The IRS cannot target or intimidate any individual or organization based on their political beliefs,” the Virginia Republican said.

Cantor’s comments were followed within minutes by House Ways and Means Committee Chairman Dave Camp saying he would hold a hearing.


Read more: http://www.foxnews.com/politics/2013/05/11/house-republicans-swiftly-announce-hearing-on-irs-targeting-conservative-groups/

---

Here is the latest effort by Republicans and Conservative media to try to spin their efforts to break the law and funnel millions in to Dark Money 501(c)(4) organizations into an conspiracy by Democrats and political watchdogs as the ones breaking the law. To begin with, campaign contributions are NOT tax deductible and only organizations that principally engaged in social welfare should be tax exempt. Yet, many overtly political and right wing groups obtained tax exempt status with the most notable being Karl Rove's group Crossroads GPS.

Now, Republicans are complaining that the IRS flagged groups that had the word "Tea Party" in their applications for tax exempt status as potentially being engaged in political activity, as opposed to social welfare. All, I can say is, I should hope so! I mean if someone sends in an application for a group called, "Win back the White House in 2014," I would hope that the IRS does not just rubber stamp it as a social welfare group. Yet, this is exactly what Republicans are claiming should be one with respect to Tea Party groups, which were engaged in significant political activity such as Rove's Crossroads GPS.

When I contribute to a Democratic candidate, my name gets disclosed. Why should billionaires be able to hide their identities and contributions of dark money to right wing groups pretending to be 501(c)(4) social welfare groups?

http://thehill.com/blogs/on-the-money/domestic-taxes/217987-irs-takes-heat-from-gop-dems-over-tea-party-groups-tax-exempt-status

The Internal Revenue Service is taking heat from both Republican and Democratic lawmakers for its oversight of certain groups engaging in political activity, in particular Tea Party organizations seeking tax-exempt status.

In recent weeks, GOP lawmakers have followed up with the agency over complaints from Tea Party groups that feel the IRS is unfairly targeting their applications for tax-exempt status.

But on the other end of the spectrum, some Democrats on Capitol Hill have been asserting that the IRS is not looking carefully enough at groups seeking a tax-exempt 501(c)(4) designation, a label given to organizations principally engaged in social welfare.

Doug Shulman, the IRS commissioner, defended his agency’s efforts during congressional hearings last week, stressing that the IRS prides itself on being nonpartisan and that the rules surrounding tax-exempt groups are complex.

[Iliyah]

1. I think they are dying

bottom line, instead of jobs

[ZRT2209]

2. Lorita Doan

[tularetom]

3. Why shouldn't the IRS investigate groups that advocate the elimination of income taxes?

Isn't there reason to suspect that people who feel this way might be tempted to cheat on their own taxes?

I've been audited twice and never had to pay an extra dime. Maybe I should get an apology too.

[okaawhatever]

4. It waasn't even about auditing. It's about the application process. Also, here's the rub. They

applied for social welfare group tax exemption, not political party. These are the groups scotus said could participate in politics if it wasn't their primary purpose. These groups are allowed to accept money from out of the country and don't have to disclose donors. The ruling is new, so there isn't alot of precedent about handling the applications. But here's the question I have for the gop: How can someone target a political group for applying for a social welfare org exemption if they're not allowed to be a political group to begin with? Also, tea party means nothing. There isn't one official tea party in the united states. Anyone can use the name, and some who have have ties to white supremacist organizations and shady fundraising. So why is the gop outraged again? I'm personally disappointed at the moral outrage of some of the so called Obama supporters jumping on this anti-Obama band wagon here (you're not doing that, just had to say it). Especially since both irs officials named have been Bush appointees. I'm thinking this may be a set-up by the gop. One gop appointee does something wrong, and another (and former gop banking lobbyist) apologizes immediately? Suspicious.

[TomCADem]

10. Agree, that the IRS should investigate...

The GOP argues that these groups are being targetted for their politics even though politics are not supposed to be their primary purpose. So, is the GOP seriously suggesting that it isn't right to apply scrutiny to a group like Crosslands GPS? Also, using the social welfare exemption to try to get around campaign finance laws certainly merits close review. Finally, to suggest that Tea Party means nothing? I think the GOPs arguments are pretty shaky. NPR did a whole series on how poltical operatives are using 501(c)(4) organizations to funnel money to mostly right wing causes while hiding the names of donors.

[okaawhatever]

12. I think the npr stories, and some one else is doing a series on the same thing is what has prompted

the backlash. It's pretty much at the tipping point for investigations. Several non-partisan campaign finance watchdogs have been very public lately and they have also dug up their own info. I'm not a big conspiracy theorist, but it wouldn't suprise me one bit if this leak, and possibly the original investigation itself, was done in support of the gop. You've got 2 bush people involved, and let's face it the gop has as much to worry about from the tp as we do. The only reason they haven't told them to f off is because they'd do a third party campaign like ross perot and take their voters.

[totodeinhere]

18. I understand what you're saying here but we have to be careful.

Advocating the elimination of the income tax is a political position. While it may be a far right wing position it is certainly not illegal to take such a position and people should have the right to advocate that if they want to without fear of retribution from the IRS. We are getting on a very slippery slope if we start targeting either groups or individuals for taking certain political positions that we don't agree with no matter how extreme those positions might be.

Some Republican administration in the future could use this as a precedent for targeting liberal groups or individuals that take political positions.

[jmowreader]

21. No one's talking retribution here, except the anti-IRS crowd

The section of the Code they use is intended for social welfare organizations...oh, pick one fairly benign, like the Shriners. Because the mission of the Shriners requires a certain amount of political activity, they are allowed to engage in it - but the Shriners can't wake up one morning, decide to close all their hospitals, devote all their energies to politics, and keep their tax exemption.

The tea party started out as a far-right political club and has remained purely as such. To suggest some loftier purpose is absurd. As such, the IRS is perfectly justified in crawling through them...if they want the tax treatment granted a social welfare group, the onus is on.them to prove they deserve it as taking people at their word has never been one of the IRS's defining traits.

[SnakeEyes]

30. Should the FBI investigate groups

for possibly violating drug laws if they advocate for legalization?

[lrellok]

5. Lets see here...

A group of people who have spent the past three years running all over the nation advocating tax evasion are now sobbing hysterically when the IRS double checks to see if they where attempting tax evasion. What was it Benjamin Butler said?
"...and they must recon with the inconvenience of being taken at their word."

[Skittles]

29. I agree, they are absolutely pathetic

yes INDEED

[SnakeEyes]

31. I hope you don't join a group advocating

legal changes, such as drug laws. Otherwise the government has a right to investigate you to see if you are a drug dealer/maker/user.

[caseymoz]

6. A potential embarrassment for the GOP.

I think it's a trap, because in hearings it's going to come out that the IRS has every good reason to scrutinize these groups.

And they're falling into it like anybody could have predicted they would. It's the kind of hearings they've done in the past, only the legal environment has changed.

[jmowreader]

7. If the GOP wants to get rid of 501(C)(4) status, this is a good start

This is Wikipedia's description of this status:

501(c)(4) organizations are generally civic leagues and other corporations operated exclusively for the promotion of social welfare, or local associations of employees with membership limited to a designated company or people in a particular municipality or neighborhood, and with net earnings devoted exclusively to charitable, educational, or recreational purposes.[31] 501(c)(4) organizations may lobby for legislation, and unlike 501(c)(3) organizations they may also participate in political campaigns and elections, as long as its primary activity is the promotion of social welfare.[32] The tax exemption for 501(c)(4) organizations applies to most of their operations, but contributions may be subject to gift tax, and income spent on political activities - generally the advocacy of a particular candidate in an election - is taxable.[33]
Contributions to 501(c)(4) organizations are usually not deductible as charitable contributions for U.S. federal income tax, with a few exceptions.[34] 501(c)(4) organizations are not required to disclose their donors publicly.[35]
The lack of disclosure has led to extensive use of the 501(c)(4) provisions for organizations that are actively involved in lobbying, and has become controversial.[36][37] Criticized as "dark money," spending from these organizations on political TV ads has exceeded spending from Super PACs.[38][39]

The "primary activity" of any Tea Party group is, very specifically, extremely-conservative political activism. They might run a food drive on occasion, or clean up a park, but we're not talking the Shriners or Lions here. They're not a service organization, which is what this designation was designed for. They are a political club. As such, tea party groups applying for this status have committed the crime of falsifying an official government document.

[okaawhatever]

13. they claim they educate the public on matters of the constitution. Here's an article from January

abpout it.

http://crooksandliars.com/karoli/former-irs-director-shadowy-nonprofits-inve

[jmowreader]

14. Well, in that case...

I should be able to open a production house specializing in hardcore porn and register it as a 501(c)(4) based on my claim we educate people about safe sex.

[okaawhatever]

15. Absolutely. Porn ftw. Nah, cuz that bush appointee lady in charge of approving apps will call Pat

Robertson and the moral majority on your azz.

[Spitfire of ATJ]

8. Audit hearing members.

[DallasNE]

9. The Disclosure Laws Have Been Around For 100 Years

So don't expect them to change. The IRS targets all kinds of things and I am not a fan of sweeps of this nature but it is silly to claim that they were targeting conservative political philosophy when they were targeting 501(c)(4) organizations and got a little sloppy with how they went about it. Nearly all of these groups are conservative. But it is unclear what the IRS would do once they have a list of these 501(c)(4) organizations. Here are what the IRS guidelines are for these kind of organizations.

Social Welfare Organizations - Examples

Some nonprofit organi­zations that qualify as social welfare organiza­tions include:
• An organization operating an airport that serves the general public in an area with no other airport and that is on land owned by a local government, which supervises the airport’s operation,

• A community association that works to improve public services, housing and resi­dential parking; publishes a free commu­nity newspaper; sponsors a community sports league, holiday programs and meetings; and contracts with a private se­curity service to patrol the community,

• A community association devoted to preserving the community’s traditions, ar­chitecture and appearance by represent­ing it before the local legislature and administrative agencies in zoning, traffic and parking matters,

•An organization that tries to encourage in­dustrial development and relieve unem­ployment in an area by making loans to businesses so they will relocate to the area and

• An organization that holds an annual festi­val of regional customs and traditions.

Clearly, Rove's organization does not fit any of the examples. Not even close. But from a legal standpoint this list should not be considered all inclusive. But that gets to the next rule that says less than 50% of a groups expenditures can be spent on lobbying efforts, which these campaign ads are considered. But that is a long standing rule the IRS uses rather than anything specifically written into the law. It probably will take a court challenge to see whether this rule is within the authority of the IRS. Yes, the courts could rule that the IRS has had this wrong for the last 70 years. In the last several years the spending in campaigns from these 501(c)(4) groups has gone from 1% to 47% with nearly all of this change coming after a 2007 court ruling on a Wisconsin case that lifted spending limits in the 60 days prior to an election.

[Gabby Hayes]

11. Spit-take. Okay, all of you "Tax Patriots" (including you, Rand) step forward

By the time he died, my late father was nearly lame from kicking my brother's butt for messing around with "Patriot" tax and investment schemes. Besides flirting with federal jail time, these schemes attract a whole food chain of parasites. Speaking of Rand Paul:

http://www.motherjones.com/mojo/2013/05/rand-paul-fatca-repeal-offshore-tax-evasion

Also, by now the search engines are probably filling up with results for "Patriot" financial schemes. Here are a couple of oldies to start with:

http://www.justice.gov/opa/pr/1996/Jun96/311tax.htm

http://www.nytimes.com/1996/03/29/us/officials-say-montana-freemen-collected-1.8-million-in-scheme.html

[timdog44]

16. If someone was holding two

pieces of paper and on said Democrat and one said Republican, and that person accidentally dropped the one that said Republican, the idiot republicans in the house would demand a house investigation of that sacrilege.

This whole things speaks to the only way campaigns should be financed and that is individual donations directly to the candidate and no other nefarious or "soft" donations. Period.

[santamargarita]

17. The IRS is not only justified in investigating these

criminals, but there should be investigations for treason and acts of Terrorism.

[bemildred]

19. And THAT is why they are so anxious to put an end to it. nt

[santamargarita]

20. Good point...

[Doctor_J]

22. What a shame that Pelosi decided in 2007 to be nice

we had four years to target these tumors like Issa and King and Graham and Cheney. She and whoever tells her what to do decided to let the cancer go untreated. A mistake that will cost the entire country dearly for another generation or more.

[Jim Lane]

23. 501(c)(4) status isn't limited to completely nonpartisan civic-improvement groups.

Both the NRA and the Sierra Club are 501(c)(4)'s.

Also, note that the term "tax exempt" can be ambiguous. You write: "To begin with, campaign contributions are NOT tax deductible and only organizations that principally engaged in social welfare should be tax exempt." Organizations that qualify under 501(c)(3) or under 501(c)(4) don't have to pay taxes, but the automatic deduction for charitable contributions is available only for donations to a 501(c)(3) organization. Nothing in the OP gives reason to believe that Rove's fat cats are deducting their contributions to Crossroads.

[TomCADem]

24. Its Not About Tax Deductions. Its Disclosure and Campaign Finance Limits

The fact of the matter is that normal folks have to disclose their identity when they contribute to a political campaign. The current attack on the IRS is driven by anonymous GOP donors. Yes, the Democrats have George Soros, but generally I think most folks would welcome having the rich (conservative and liberal) play by the same rules and be subject to transparency laws as the rest of us.

http://www.dailykos.com/story/2011/09/01/1012560/-501-c-4-Organizations

The fight began earlier this year when the IRS tried to impose a gift tax on five Republican donors' donations to 501(c)4s. The Republicans, led by Senator Orrin Hatch and other members of Congress, complained that IRS was being manipulated by the Obama Administration and the IRS subsequently decided that it would delay imposing the gift tax until it reviewed one of its prior rulings. Four anonymous political donors are now accusing the IRS of a lack of impartiality with their rule-making process. In an additional controversy, the IRS in April ruled that tax-exempt hospitals could set-up 501(c)4s for political purposes.

[Jim Lane]

33. The OP referred to tax deductions, so I was clarifying.

From the OP: "To begin with, campaign contributions are NOT tax deductible and only organizations that principally engaged in social welfare should be tax exempt."

[blkmusclmachine]

25. Meh.

The IRS is doing its job.

[BlueStreak]

26. What's wrong with targeting groups that are seeking special tax treatment?

We know for a fact that many of these groups were not what they represented themselves to be. Far from being actual political action groups, some of them were just shells for con men scamming money from people who were conservative and not overly smart.

The IRS SHOULD look into groups like that.

Is there any evidence that any such group was treated unfairly in the process?

[TomCADem]

27. Yes, We Should Also Examine Billionaires Funneling Millions Toward Liberal Causes...

...anonymously through 501(c)(4) entities.

Actually, do you know any? What I think is unfair is that the right wing seems to get all of the Billionaires anonymously donating millions to push conservative causes like Proposition 8's ban on gay marriage or pro-wealthy tax breaks.

[BlueStreak]

32. The IRS should look closely at any organization seeking tax-free status

I set up a 501(c)(3) a decade ago. Although it was a clear-cut educational charity -- 95% of the man-hours performed by this group are unpaid volunteers -- I still had to jump through all the IRS hoops.

We know that many of these so-called issue advocacy groups are actually shams. They either are just fronts for fund-raising scams or else they are actually political campaign outfits that are not entitled to tax-free status. The IRS SHOULD be digging into those very closely. And as this article points out, it was not just the teabaggers. They targeted a wider range of organizations that were likely to be frauds.

http://livewire.talkingpointsmemo.com/entry/reports-irs-conducted-broader-targeting-of-groups?ref=fpb

And once again, has there been a single legitimate teabagger group that was denied their status by the IRS? I have not heard of a single one.

[Cha]

28. IOW.. the republicons Wasting Taxpayers MONEY, AGAIN.