The blame game

[Bees Knees]

It seems strange that (unless used in an Orwellian sense, say like "The People's Republic of China") the goverment regards the word "patriot" with suspicion.

Not when you look at the context of what was behind it all. The IRS was asked by Congress to look into these organizations. From the Treasury Inspector General For Tax Administration report:

During the 2012 election cycle, the activities of tax-exempt organizations received media coverage concerning the amount of money spent on influencing elections. According to the Center for Responsive Politics, tax-exempt groups, such as I.R.C. § 501(c)(4), I.R.C. § 501(c)(5), and I.R.C. § 501(c)(6) organizations, spent $133 million in Calendar Year 2010 on Federal candidate-oriented expenditures. In Calendar Year 2012, this figure increased to $315 million.

…several members of Congress requested that the IRS investigate whether existing social welfare organizations are improperly engaged in a substantial, or even predominant, amount of campaign activity.

So if Congress were to ask you to investigate whether or not social welfare organizations are organized primarily for campaign activity (a violation of their tax-exempt status), how would you go about investigating?

How do you search 70,000 applications for tax exempt-status when your office has a staff of 200?

Would you perhaps look for political buzz words in their applications to find the ones most likely to be involved with politics?

[LCP]

Not when you look at the context of what was behind it all. The IRS was asked by Congress to look into these organizations. From the Treasury Inspector General For Tax Administration report:



So if Congress were to ask you to investigate whether or not social welfare organizations are organized primarily for campaign activity (a violation of their tax-exempt status), how would you go about investigating?

How do you search 70,000 applications for tax exempt-status when your office has a staff of 200?

Would you perhaps look for political buzz words in their applications to find the ones most likely to be involved with politics?

Sound very reasonable. The next step is to look at which Congressmen asked them to investigate....... and then which political buzzwords they focused on the most ..... and then what questions they asked and info they requested...... and then how long it delayed the process ..... and then how many opportunities they had to come clean and provide info on what was going on by the same Congress that got the ball rolling in the first place.

Question ....... if it takes a number of years to get a non-profit request approved, what happens in the interim? Does the organization have to file a corporate return and pay taxes? Can the return be amended later to get those taxes back?

[taxea]

I was thinking this issue will hamper IRS from getting Congressional support for the proposed legislation that would give IRS statutory authority to regulate tax preparers. If everyone is mad at IRS right now, nobody is going to approve giving them even more power. If the appeals court decision doesn’t rule in favor of the IRS, we might not see RTRP rules and regulations anytime soon.

Congress are the ones that make the rules the IRS is required to enforce. Perhaps they are as confusing to the IRS as they frequently are to us. As for the RTRP, no such luck...there is a law in the works meant to provide the IRS with the authority they don't presently have and former commissioners seem to think that preparers are representatives of the tax payer by the nature of their work. I disagree on that one but we will have to wait and see what the end result is.

[Bees Knees]

Question ....... if it takes a number of years to get a non-profit request approved, what happens in the interim? Does the organization have to file a corporate return and pay taxes? Can the return be amended later to get those taxes back?

By default, all organizations are taxed as C corporations until they are approved for tax-exempt status. No, they cannot amend prior year returns to get their taxes back.

Another interesting side issue that you aren't hearing in the media is that 501(c)(4) organizations are not required to apply for exempt status with the IRS. They can be considered approved for tax-exempt status by merely filing as a tax-exempt. From the Treasury Inspector General report:

Organizations, such as charities, seeking Federal tax exemption are required to file an application with the Internal Revenue Service (IRS). Other organizations, such as social welfare organizations, may file an application but are not required to do so.

So in other words, if you are a charity and want 501(c)(3) status, you have to file an application with IRS. But if you want to be a 501(c)(4) social welfare organization, you can just file a tax return as a tax-exempt organization. Churches are another category of organizations that do not first need IRS approval.

[Black Bart]

Well,

So if Congress were to ask you to investigate whether or not social welfare organizations are organized primarily for campaign activity (a violation of their tax-exempt status), how would you go about investigating?

How do you search 70,000 applications for tax exempt-status when your office has a staff of 200?...

it depends.

If I were one of those administration-deemed "rogue" Cincinnati agents (whether fool or knave) and 33 out of the first 100 apps were submitted by gun-totin', cousin-marryin' yahoos; then I would have felt safe enough in today's political ambience to search for "patriot/tea-party" in the next 69,900.

On the other hand, if they originated from progressive, social welfare organizations; then I would assign 350 cases to each of the 200 agents. After all, they had plenty of time didn't they?

But that's all I'll say -- as you pointed out earlier, it's political (and futile too since no minds are changed by the back and forth).