Numerous Tea Party chapters claim IRS attempts to sabotage nonprofit status
Published February 28, 2012 | FoxNews.comTea Party chapters around the nation are blasting the Internal Revenue Service after the federal agency sent them letters demanding information about their politics, contributors and even family members.
In letters sent from IRS offices in Cincinnati earlier this month, chapters including the Waco (Texas) Tea Party and the Ohio Liberty Council were asked to provide a list of donors, identify volunteers, financial support for and relationships with political candidates and parties, and even printed copies of their Facebook pages.
"Some of what they (the IRS) asked was reasonable, but there were some requests on there that were strange," Toby Marie Walker, president of the Waco Tea Party told FoxNews.com. "It makes you wonder if they do this to groups like ACORN or other left-leaning groups.”
Read the complete letter sent to the Waco Tea Party by the IRS
The chapters that received requests were registering for nonprofit status as a 501(c)4 organizations. The classification mainly differs from 501(c)3 groups in that donors cannot deduct their contributions from their taxable income.
The tax code places fewer restrictions on 501(c)4 groups, allowing them to lobby in furtherance of their organizations' mission. They are also permitted to engage in political activity like endorsing candidates and donating money and time to specific campaigns, though it cannot be their primary activity.
The more tightly controlled, but more heavily subsidized 501(c)3 groups may not participate in specific campaigns at all.
Tea Party leaders say they were particularly offended by demands that they name donors and volunteers, which is required by law, but were also asked to list any political ambitions of board members or their relatives.
Colleen Owens, spokeswoman for the Richmond (Va.) Tea Party claims that her chapter had a similar letter sent to them just two weeks before they were to hold a local convention in which they were asked to provide nearly 500 pages in documents.
They were required to return the requested documents two days before the start of the convention.
"Most of these groups are not wealthy and they've had their applications for 501(c)4 status since 2010," Owens said. "We only had two weeks to gather everything. The timing was suspicious."
"When determining whether an organization is eligible for tax-exempt status, including 501(c)(4) social welfare organizations, all the facts and circumstances of that specific organization must be considered to determine whether it is eligible for tax-exempt status. To be tax-exempt as a social welfare organization, they must be primarily engaged in the promotion of social welfare," said a spokesman for the IRS.
"Career civil servants make all decisions on exemption applications in a fair, impartial manner and do so without regard to political party affiliation or ideology."
Experts contacted by FoxNews.com agreed the timing of the letters was problematic, though the information requests are not particularly sinister.
"These are standard inquiries," said Ellen Aprill, a professor who teaches tax law at Loyola Law School in Los Angeles. "If they (the Tea Party chapters) do nothing but campaign intervention, then they have to file as a 527 organization.”
But Tom Zawistowski, of the Ohio Liberty Council, a Tea Party chapter, called questions about donors, volunteers and members' relatives "intelligence gathering."
"This has nothing to do with tax status," Zawistowski said. “It has to do with political affiliation. The questions are too close to home."
"It's very intimidating and people are scared," Owens said
So, now I ask myself (as well as you should yourself): Will the IRS likewise investigate the Occupy Wall Street mob? The Daily Caller reports that they've got a bank account with $99,000 in it (emphasis added) --
Back in October, Michelle Malkin of HotAir.com reported on the $150,000 OWS was able to quickly raise, depositing the money in Amalgamated and another credit union. She reports on OWS' alliance with Alliance for Global Justice and AGJ's 501(c)(3) status (Occupy Wall Street garners $150,000 in donations). In the post, she quotes a liberal tax attorney who writes about his concerns regarding OWS and AGJ's questionable tax status:Occupy Wall Street bank statement shows $99,000 balance, expenses for housing, property damage, bail
The Daily Caller has obtained a copy of a December 2011 bank statement mailed to Occupy Wall Street, the anti-capitalist protest group whose leaders’ rallying cry positions them as defenders of America’s less-privileged “99 percent.” But the organization’s bank balance in December may instead re-cast the occupiers as defenders of the $99,000.
The bank statement was mailed to the organization at a box rented in a UPS Store on Fulton Street in lower Manhattan. On the Dec. 30 closing date, Amalgamated Bank reported $99,549.58 in the account, including $23,120 in deposits during that month alone.
Amalgamated is owned by the Workers United labor union.
TheDC has also obtained copies of two December statement pages from a second bank account owned by an Occupy Wall Street-affiliated organization called Friends of Liberty Park. Those pages show records of nine checks and ten cash withdrawals, all signed by Pete Dutro, the group’s leader and Occupy Wall Street’s financial manager at the time.
While the materials clearly reflect two separate bank accounts, only the last two digits of their nine-digit account numbers are different. TheDC has redacted its copies of the documents to remove those account numbers.
Sources who provided TheDC with copies of the bank statements also provided a copy of meeting minutes from a Feb. 17 gathering of an Occupy Wall Street subgroup called “OWS Reform.” Notes taken during the meeting include an observation that the Friends of Liberty Park account “went from $310,168.74 at 12/01 to $147,040.15 at 12/30,” reflecting a loss of more than half the account’s value during the month of December.
“Why not call an independent auditor and have them go over the books?” the minutes ask. Criticizing the movement’s self-anointed finance officers, they complain that a lack of access to the movement’s bank accounts “gives them hierarchy in a supposedly leaderless movement.”
Wow! As I continue checking around the Internet, it seems that a number of groups have been reported to the IRS by differeng organizations requesting investigations. I'll be following up this! Stay tuned!I’m a liberal in good standing and an attorney with a good deal of experience with charities.. While I obviously disagree w/ you on most things political, you’ve always struck me as reasonable, and my loathing of the abuse of charitable status is one of those things that really gets under my skin. You may or may not think any of this is interesting, but if you do I’d greatly appreciate confidentiality.
That said: I saw the other day that Occupy Wall Street had gotten $150k in contributions, so that led me to the site to figure out their tax status, assuming that there wouldn’t be anything in particular, which would mean the income should be taxable. That, in turn, led me to their donation page at an organization called “Alliance for Global Justice.” It turns out that AGJ is a 501(c)(3) tax exempt public charity, and it’s using its exemption to collect tax deductible contributions and then disbursing the funds to the protesters (under the aegis of “fiscal sponsor,” a generally accepted tool for charities). So AGJ is taking the position that the protests are “charitable,” and getting the taxpayers to subsidize the protests to the tune of 35 cents per dollar contributed. On their 3/31/11 Form 990, they report zero lobbying expenses, which, based on a cursory review of their website, seems absurd. Granted, “lobbying” is a bit of a term of art in exempt organization law, so it may or may not be accurate.
At any rate, this is flatly outrageous. While I couldn’t stand the tea party, at least they didn’t have the nerve to call themselves a charity and accept deductible donations
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