IRS admits targeting conservative groups

[Teggy]

This may be the first time I've seen someone request a ban because they want to leave the forums. Just leave the forums. Why does that require moderator intervention?

This isn't even the first time he's done it, although I can't remember if the first time was here or at GT.

[hepcat]

Both, actually.

[Skinypupy]

So you're saying the inside scoop to the overreaction on the political cases is to overreact even more. And the GOP is going to use the slowness from this and the sequester as proof government doesn't work.

Yeah, pretty much. A sad state of affairs all around.

[Skinypupy]

Conservative group spends $65,000 in ads against a Dem candidate, then claims to the IRS that they spent nothing on “direct or indirect political campaign activities" when applying for non-profit tax exempt status.

I'm sorry...remind me again why these groups don't deserve extra scrutiny from the IRS?

[Rip]

Conservative group spends $65,000 in ads against a Dem candidate, then claims to the IRS that they spent nothing on “direct or indirect political campaign activities" when applying for non-profit tax exempt status.

I'm sorry...remind me again why these groups don't deserve extra scrutiny from the IRS?

People spent their money on campaigning. So what? Was this some big corp with a lobbyist? Nope just an organization that people donated to that then spent that money on what thse people wanted(apparently). Still don't see the big deal. I see no reason any of these groups should not be able to spend their money the way they want. Is anyone out there talling unions how much they can spend on campaigns and lobbying? If not then screw them, they spend their money I spend mine. Unless it involves taking money for one purpose and spending it on something different entirely (like unions among others do) I see no problem. Now show me where they collected money telling those folks it was for one thing and spending it on something else (the way a good chuck of charities do) I will try to get some outrage up over it.

[hepcat]

That's not the issue and you know it.

[Zarathud]

People spent their money on campaigning. So what?

The applications for tax exemption are signed under penalties for perjury. If you have the stones to lie to the IRS about whether you've lobbied against a political candidate, you don't understand and/or follow the tax law. And it's the job of the IRS to enforce those rules -- not only by denying your request for tax exemption but also by bringing perjury penalties. Whenever the IRS agents think you're misleading them, they will dig in their heels and ask additional follow-up questions.

I tell my charity clients to review everything they've done in social media because IRS agents will google them and if we can't explain it in advance, they're going to get a list of questions. In a nutshell, that's exactly what happened to the Tea Party and 9/12 groups.

I see no reason any of these groups should not be able to spend their money the way they want. Is anyone out there talling unions how much they can spend on campaigns and lobbying?

The tax code disagrees with you here. Unions and other groups which have 501(c)(4) status are limited in their ability to spend on campaigns. 501(c)(3)s are either strictly prohibited or highly restricted from engaging in political activities.

Rip, you're not asking for tax-exempt status or the ability to spend other people's money without disclosure. If you don't see why this is a problem, it's no wonder you see the IRS doing its job as persecution.

[Rip]

People spent their money on campaigning. So what?

The applications for tax exemption are signed under penalties for perjury. If you have the stones to lie to the IRS about whether you've lobbied against a political candidate, you don't understand and/or follow the tax law. And it's the job of the IRS to enforce those rules -- not only by denying your request for tax exemption but also by bringing perjury penalties. Whenever the IRS agents think you're misleading them, they will dig in their heels and ask additional follow-up questions.

I tell my charity clients to review everything they've done in social media because IRS agents will google them and if we can't explain it in advance, they're going to get a list of questions. In a nutshell, that's exactly what happened to the Tea Party and 9/12 groups.

I see no reason any of these groups should not be able to spend their money the way they want. Is anyone out there talling unions how much they can spend on campaigns and lobbying?

The tax code disagrees with you here. Unions and other groups which have 501(c)(4) status are limited in their ability to spend on campaigns. 501(c)(3)s are either strictly prohibited or highly restricted from engaging in political activities.

Rip, you're not asking for tax-exempt status or the ability to spend other people's money without disclosure. If you don't see why this is a problem, it's no wonder you see the IRS doing its job as persecution.

Are you actually trying to tell me that unions don't spend crazy amounts of cash trying to influence politics? Really???

[Zarathud]

Well, unions and other 501(c)(5)s were restricted until Citizens United. Does that make you feel better?

Gotcha.

The political restrictions on 501(c)(3)s and 501(c)(4)s are conditions for their tax-exempt status. Unions can meet the tests because organization for their members is the substantial part of their activities, not lobbying. A big union can spend lots of money because it's big and still meet the tests. The small Tea Party groups can't -- if they could, they could get IRS exempt status right now by agreeing to limit their political activity to 40% of their total activity. As I said above.

[Isgrimnur]

And if you ever get to the point where you want to know what their financials are saying, look it up.

[Zarathud]

Thanks, Izzy. Let's make it easy for the peanut gallery.

In the year ending 6/30/2012, AFI-CIO spent $45 million in political activities and lobbying, but they also disbursed over $191 million for all their activities. That's 23.5% of their total cash spent. The Tea Party groups couldn't show they were spending less than 40-50% for political activities.

Put another way, the Tea Parties couldn't show they were doing less than twice as much political activity as those "crazy" unions. So it's absurd to think the Tea Party wasn't going to get in trouble with the IRS.

[Isgrimnur]

I went with the one with which I had direct experience: CWA (sub AFL-CIO)

51. Political Activities and Lobbying 16 $3,230,142
...
68. TOTAL DISBURSEMENTS $289,445,998

1.116%

[theohall]

Thanks, Izzy. Let's make it easy for the peanut gallery.

In the year ending 6/30/2012, AFI-CIO spent $45 million in political activities and lobbying, but they also disbursed over $191 million for all their activities. That's 23.5% of their total cash spent. The Tea Party groups couldn't show they were spending less than 40-50% for political activities.

Put another way, the Tea Parties couldn't show they were doing less than twice as much political activity as those "crazy" unions. So it's absurd to think the Tea Party wasn't going to get in trouble with the IRS.

How about Move On.org and why they are still classified as a charity by the IRS?

[Skinypupy]

Thanks, Izzy. Let's make it easy for the peanut gallery.

In the year ending 6/30/2012, AFI-CIO spent $45 million in political activities and lobbying, but they also disbursed over $191 million for all their activities. That's 23.5% of their total cash spent. The Tea Party groups couldn't show they were spending less than 40-50% for political activities.

Put another way, the Tea Parties couldn't show they were doing less than twice as much political activity as those "crazy" unions. So it's absurd to think the Tea Party wasn't going to get in trouble with the IRS.

How about Move On.org and why they are still classified as a charity by the IRS?

Then I'm assuming you realize that MoveOn.org is comprised of two entirely separate legal entities. MoveOn Political Action is not tax exempt because they focus on political campaigns and endorsing specific candidates. MoveOn Civil Action is exempt because they focusing on civic issues, without funding endorsement of specific candidates. It's even spelled out in their donations page:

MoveOn.org Civic Action is a 501(c)(4) organization. Contributions are not tax deductible because they will be used to influence legislation.

MoveOn.org Political Action is a federal political committee, and therefore contributions made to our PAC are not tax deductible.

The problem arises when Tea Party groups (like the one I liked to above) claim 501C4 status, then turn around and specifically campaign for/against candidates. That's a very clear violation of 501C4 status. If they want to do that, they're more than welcome to...just set up a separate entity used for campaigning, like MoveOn did.

[Zarathud]

A competent charity tax advisor would know these rules. I have set up action organizations split into 501(c)(3) educational branches, 501(c)(4) social and legislative action groups and 527 political advocacy committees. It's not prohibitively expensive. If the entities fundraise separately for each group, it's not too administratively difficult if they are diligent about following the rules about which group can do a particular activity. You just need to know and follow the rules. Why is that so hard?

[PLW]

A competent charity tax advisor would know these rules. I have set up action organizations split into 501(c)(3) educational branches, 501(c)(4) social and legislative action groups and 527 political advocacy committees. It's not prohibitively expensive. If the entities fundraise separately for each group, it's not too administratively difficult if they are diligent about following the rules about which group can do a particular activity. You just need to know and follow the rules. Why is that so hard?

Because... Freedom.

[Rip]

Except that when Media Matters does stuff it calls non-political, it is often still political even if not directly campaigning. Today they blame the Obamacare fiasco of the month on Drudge and Foxnews.

The pro-Obama media watchdog Media Matters Wednesday, defending the administration's surprise move to cancel implementation of major elements of Obamacare, said that Republicans were to blame and accused conservative media leaders like Fox News and the Drudge Report for ignoring the GOP's role.

In a release, the liberal group said that Fox and Drudge instead charged that the one-year delay was political with the goal of pushing off the expected initial implementation disaster until after the 2014 elections.

"Fox News and the Drudge Report are ignoring years of Republicans obstructing the implementation of health care reform to accuse the Obama administration of delaying the law for political gain, in the process dismissing the fact that businesses are praising the administration's move," said Media Matters.

http://washingtonexaminer.com/liberals- ... le/2532659

I would be amazed if they do anything that isn't somehow tied to their political agenda.

[Zarathud]

Weak sauce. 501(c)(3)s like Media Matters are allowed to conduct unlimited "educational activity" so long as it does not advocate for or against political candidates or for or against particular legislation or changes. The organization can only conduct a limited amount of political activity. the cost of those press releases? almost nothing, so even if it was political activity it doesn't jeopardize the rest of what they do. the Rand Corporation and Heritage Foundation both do the same thing.

[Smoove_B]

Hilarious -- House GOP Proposes Slashing IRS Budget:

The House Appropriations Committee proposed a $9 billion budget for the IRS in fiscal year 2014, which starts Oct. 1–a 24% cut from the $12.2 billion level enacted in the current budget.

I'm sure they could totally operate with a 24% reduction in their budget and that this in no way was proposed in retaliation. We really are a nation of children.

[Exodor]

I'm sure they could totally operate with a 24% reduction in their budget and that this in no way was proposed in retaliation. We really are a nation of children.

Wasn't a lack of resources part of the reason for the clumsy filtering process - made worse by the flood of applications after Citizens United?

Talk about setting them up to fail.

[Smoove_B]

Talk about setting them up to fail.

Them failing is one thing -- how about them dragging us all down? Part of the problems with Greece (IIRC) was a tax collection system that was cut down to the bone, pretty much setting up a scenario where it was easy to dodge taxes and avoid collection.

[LawBeefaroni]

Kind of related, from the political randomness thread, it appears that most of the small business contracts awarded by the IRS on a preferential basis turn out to be shell contracts that send most of the money to big business, in direct contradiction of the intent of the program.

Holding select political organizations to the fire for their ill-gotten tax-exempt status seems trivial to me in comparison.

[theohall]

Weak sauce. 501(c)(3)s like Media Matters are allowed to conduct unlimited "educational activity" so long as it does not advocate for or against political candidates or for or against particular legislation or changes. The organization can only conduct a limited amount of political activity. the cost of those press releases? almost nothing, so even if it was political activity it doesn't jeopardize the rest of what they do. the Rand Corporation and Heritage Foundation both do the same thing.

Media matters regularly advocates about legislation. They consistently advocate in favor of whatever Obama wants.

[Zarathud]

Education about legislative issues is permitted so long as there is no call to action like "pass/repeal bill X" or "contact your legislator Y about bill/issue X."

Found out today that the IRS exempt division is starting on tax exempt applications submitted in April 2012. That's 1 1/3 years behind -- a backlog far beyond the Tea Party cases.

Thinking that was political targeting shows ignorance especially when the GOP wants to cut another 25% from the IRS budget. The IRS doesn't have the manpower to keep up after 3 years of hiring freezes. The express goal is to starve government by any means.

[Arcanis]

Are you sure about the contact your legislator part Zarathud? I thought they could advocate that as long as they weren't advocating for you to call them and push them a certain way. ie "Call your senator and tell them how you feel about this legislation" is ok while "Call your senator and tell them to vote up/down on senate bill 123" would not be.

[Exodor]

Scandal!

According to the letter, Democrats on the committee now have received several new documents from the IRS, which refer to the screening of applications from "progressive" and "Occupy" groups. A PowerPoint from a July 28, 2010 meeting, for instance, includes the term "progressive" along with "Tea Party," "Patriots," and "9/12 Project." The minutes from the same meeting indicate that "Progressive" groups "should be sent to Group 7822, the same group in the IRS office in Cincinnati that was designated to handle Tea Party applicants," according to Cummings.

"Given the new documents obtained by the Committee—and the serious questions they raise about the Inspector General’s report, his testimony before Congress, and his subsequent assertions in letters to Members of Congress—I believe it is necessary to call him back before the Committee to explain why he failed to disclose this critical information," Cummings wrote to Issa.

I think the biggest scandal to come from this IRS hoo-hah is going to be the Inspector General lying under oath to congress.

[Pyperkub]

Weak sauce. 501(c)(3)s like Media Matters are allowed to conduct unlimited "educational activity" so long as it does not advocate for or against political candidates or for or against particular legislation or changes. The organization can only conduct a limited amount of political activity. the cost of those press releases? almost nothing, so even if it was political activity it doesn't jeopardize the rest of what they do. the Rand Corporation and Heritage Foundation both do the same thing.

Media matters regularly advocates about legislation. They consistently advocate in favor of whatever Obama wants.

Bzzzzt! Wrong answer. They actually advocate against whatever Fox/Limbaugh/Beck/etc. want. Just because those 3 have been focused on tearing down Obama shouldn't fool you.

Of course, if that's your only source of news...

[malchior]

Talk about setting them up to fail.

Them failing is one thing -- how about them dragging us all down? Part of the problems with Greece (IIRC) was a tax collection system that was cut down to the bone, pretty much setting up a scenario where it was easy to dodge taxes and avoid collection.

Look at who would avoid collection. The rabble would still have their payroll taxes taken right out of their paychecks. It is more like they are setting up a time bomb.

[Rip]

Truth starting to come out. It just takes forever to pry it out of the holes it gets hidden in.

Newly uncovered emails show Lois Lerner, the key figure in the IRS scandal, was talking with the Justice Department about going after groups seeking tax-exempt status, just days before she publicly acknowledged the agency was targeting Tea Party and other organizations.

The emails, obtained by Judicial Watch and first reported by TownHall.com, are another indication the targeting may have stretched deeper into the Obama administration. Lerner, the director of the agency’s Exempt Organizations division before retiring last year, initially said the targeting was limited to agents working in the IRS’ Cincinnati field office.

And last week, emails obtained by the GOP-led House Committee on Oversight and Government Reform show the office of the committee's top-ranking Democrat, Elijah Cummings of Maryland, contacted the IRS in January 2013 about True the Vote, one of the conservative groups that was targeted.

A Lerner staffer in response sent the group’s related 990 IRS forms to Cummings and his staff.

In another email, Lerner discussed with agency staffers the purpose of an upcoming, April 9 2013, hearing that also suggests the targeting went beyond the IRS.

“There are several groups of folks from the [Federal Election Commission] world that are pushing tax fraud prosecution for c4s who report they are not conducting political activity when they are (or these folks think they are)," she wrote.

“One is my ex-boss Larry Noble (former General Counsel at the FEC), who is now president of Americans for Campaign Reform. This is their latest push to shut these down. One IRS prosecution would make an impact and they wouldn't feel so comfortable doing the stuff. So, don't be fooled about how this is being articulated -- it is ALL about 501(c)(4) orgs and political activity."

http://www.foxnews.com/politics/2014/04 ... targeting/

[Exodor]

Isn't investigating groups falsely claiming tax-exempt status while conducting political activities sort of the IRS's job?

[Rip]

Isn't investigating groups falsely claiming tax-exempt status while conducting political activities sort of the IRS's job?

Not sure, but if they are going to they must do it fairly rather than investigate ones that a congressman and former boss tell them to and if they are to communicate with the DOJ, FEC, and others there should be a protocol. But mostly they shouldn't falsely testify before congress that they don't know anything about it and that any scrutiny was a few rogue employees at one office, when in fact sending and receiving dozens of e-mails related to it with numerous agencies and outside parties in direct violation of the law from Washington where they are saying there was no awareness of any scrutiny.

Sure sheds a ton of light on why Cummings was doing just about anything he could to derail the investigation, he knew his balls were in the vise.

[RuperT]

Isn't investigating groups falsely claiming tax-exempt status while conducting political activities sort of the IRS's job?

Not sure, but if they are going to they must do it fairly rather than investigate ones that a congressman and former boss tell them to and if they are to communicate with the DOJ, FEC, and others there should be a protocol. But mostly they shouldn't falsely testify before congress that they don't know anything about it and that any scrutiny was a few rogue employees at one office, when in fact sending and receiving dozens of e-mails related to it with numerous agencies and outside parties in direct violation of the law from Washington where they are saying there was no awareness of any scrutiny.

Sure sheds a ton of light on why Cummings was doing just about anything he could to derail the investigation, he knew his balls were in the vise.

"Fairly?" You mean just a random queue, or you want a Fairness Analysis worksheet and stuff?
This shit infuriates me. My kid's school has waited a year and half and counting for their 501c3 and we want to investigate the secret motives of discretionary agents in a regulatory agency? Besides, Rip, you know they'll gladly hire as many more agents as it takes to double blind check everything, I mean it is important to be thorough.

[Zarathud]

I can definitively say the targeting also covered liberal 501(c)(3)s and 501(c)(4)s after getting a ruling approving the tax-exempt status of one progressive charity after a 2 year fight on my end after former counsel stalled after making no progress the 2 years before. I eventually nicely forced the IRS into admitting its line of factual questioning was one a court previously found irrelevant.

It's not malice, it's incompetence. And why is anyone shocked Lois Lerner was talking to justice shortly before disclosing some inappropriate targeting?

Anyway, this scandal over the secret aggregation of political contributions in 501(c)(4) social welfare organizations is now moot after the Supreme Court in McCutcheon held that individual donors can gift directly to campaigns nationwide.

[Pyperkub]

This is all part of the chess game. Big money wants to play without being exposed to the light. Most of the public servants who aren't politicians don't see that as a desirable thing.

[Zarathud]

With the exception of the Chief Justice of the Supreme Court. If you hide the influence of dark money, he can claim that your "money speech" is not corrupting despite the collective judgment of those likely to be corrupted by it.

[Zarathud]

Just finished reading the Lerner emails. The IRS was approached by DOJ about prosecuting when foreign money was used by a 501(c) for political activity and prosecuting 501(c)(4)s which falsely stated they would not engage in political activity. Lerner basically said prosecution was DOJ's call.

Lots of discussion about facts and working on explaining what they did. Plus, lots of CYA over initial responses to Congressional inquiries. There is also her reaction to the start of the Issa witch-hunt while she was on vacation.

Nothing is sinister -- and it was clear that Issa wanted to burn Lois Lerner from his tone. Her initial reaction -- he's not really interested in the facts.

[Pyperkub]

I'm even going to one of the crucifixion sites, and having a hard time understanding what the problem is:

This one is obviously significant. Lois Lerner says, in effect, to disregard administration spin: the effort is “ALL about 501(c)(4) orgs and political activity.” Click to enlarge:

So, it's a conspiracy!*

*to find out what the penalties should be for lying on a form to the IRS, and who should be responsible for the decision to prosecute and that current and former FEC officials are being contacting the IRS about it.

Last I checked, the definition of a 501c4 was that Political Activity was by law to be less than 50% of the organizations efforts.

[Zarathud]

Exactly. Lois Lerner even comments: DOJ will have to take the lead. We have no dog in this fight.

When the blow up occurs, she's on vacation with her husband for their anniversary while Rep. Issa is sending letters and calling demanding that she brief him the VERY NEXT DAY. Her reaction: What more does he want from me? Not sure if he even cares about the truth.

[Pyperkub]

Issa has definitely been on a witch hunt for the past 4 years. I still try to evaluate each claim on the merits, but every time he seems to be skewing the story and the facts in a 110% partisan fashion in order to generate headlines for the base, never mind the truth.

[msduncan]