Top Democrat files suit against IRS over tax-exemption rules

[alp227]

Source: Washington Post

A top House Democrat plans to file a lawsuit in federal district court Wednesday challenging the Internal Revenue Service’s interpretation of a law that governs whether groups qualify for tax-exempt status as so-called social welfare organizations.

Rep. Chris Van Hollen (D-Md.), the ranking member of the House Budget Committee, said Tuesday that he will serve as lead plaintiff in the case, which addresses one of the main concerns that surfaced with the recent IRS targeting controversy: differences between federal law and the IRS rules on eligibility for 501(c)(4) candidates.

Current law says the organizations must engage “exclusively” in social welfare activities, but IRS tax code requires only that they are “primarily engaged” in such purposes. That discrepancy has led to confusion for application processors, who have struggled to determine what constitutes political activity and how much should disqualify groups from tax-exemption, according to agency officials.

“I don’t think the IRS should be in the business of determining whether the primary purpose of an organization is political or educational,” Van Hollen said in an interview Tuesday. “The statute is very clear they should not be in that business.”

Read more: http://www.washingtonpost.com/politics/federal_government/top-democrat-files-suit-against-irs-over-tax-exemption-rules/2013/08/20/a88a3d52-09d1-11e3-b87c-476db8ac34cd_story.html

[busterbrown]

1. O.K. guys back to Benghazi...Keep the API story close... We’ll use that one soon as well. N/t

[JoeyT]

8. The way I understand it,

if he wins this will hurt the teabaggers. No more tax exempt status for yelling about how evil the government is and claiming it's somehow a public service because they're "educating" people.

[Little Milly]

2. Beautiful!

In a confidential 2010 filing, Crossroads GPS — the dark money group that spent more than $70 million from anonymous donors on the 2012 election — told the Internal Revenue Service that its efforts would focus on public education, research and shaping legislation and policy.

Political insiders and campaign-finance watchdogs have long questioned how Crossroads, the brainchild of GOP strategist Karl Rove, had characterized its intentions to the IRS.

Politically active social welfare nonprofits like Crossroads have proliferated since the Supreme Court's Citizens United decision in January 2010 opened the door to unlimited political spending by corporations and unions.

Earlier this year, a ProPublica report showed that many of these groups exploit gaps in regulation between the IRS and the FEC, using their social welfare status as a way to shield donors' identities while spending millions on political campaigns.

http://www.propublica.org/article/what-karl-roves-dark-money-nonprofit-told-the-irs

If the law says, "exclusively," it means what it says.

[Left Coast2020]

3. Just saw this on O'Donnell's show on MSNBC

According to attorney he interviewed, he claims Van Hollen has a good case--one which neo-cons have railed on for years.

This would be good if court says Treasury Department overstepped its authority by inserting "primarily" into their interpretation of the 501(c)4 law. The tea party ain't going to like this. If the court says "exclusively" is what Congress passed into law, then the Koch bros, GPS Turd-Blossom, The Dumb Patriot American Morans For Liberty, Sarah Palin Half-A-Term PAC for Stupid Congress Critters, and all those other freaks will have to go "527" which means WE WILL KNOW WHOS FUNDING THE BS TV CAMPAIGNS!!!

That would be a beautiful day which could soon happen. Oh Boy Oh Joy!!

Thank you Mr. Van Hollen!!!

[IthinkThereforeIAM]

6. I like your explanation...

... have a good day!

[another_liberal]

4. I had wondered about this very inconsistency.

If the law says they can't be involved in political activity, and it does, then all of the "Crossroads America" type groups should be paying taxes, and they should also be required to reveal the names of their donors.

How this inconsistency crept into our tax codes is yet another question which should be explored. I wonder what other laws the IRS has "interpreted?"

[Gothmog]

5. Last Word had a good interview on this lawsuit

O'donnell has been making this argument for a while

[YOHABLO]

7. Freedom From Religion organization wants to sue also in regard to churches and the IRS's

refusal to call them in on their tax exempt status .. and we all know that many many, christian evangelical churches are preaching politics all the time. I say tax em we need the revenue.