posted May 21, 2013 05:33 PM            

Stephen Colbert emerged from a glass case of scandal journalism on Monday to find out there was a perfectly good reason his own super PAC had been “slow-walked” by the Internal Revenue Service.

“Why has my application for tax-exempt status never been granted?” he asked his lawyer, Trevor Potter.

“Because we never filed it,” Potter replied, to Colbert’s surprise, since his 501 (c)(4) group was doing business and had handled at least hundreds of thousands of dollars, in Potter’s estimation.

“How is that possible, that I didn’t apply?” Colbert asked. “Am I breaking the law?”

Potter took that opportunity to remind the Colbert Report host that he was not legally obligated to apply for tax-exempt status in the first place.

“So wait a second,” Colbert said, stifling a laugh. “So you can form a 501 (c) (4) without asking to form one.” When Potter confirmed that, Colbert got a little giddier.

“So these tea party, anti-big government organizations didn’t have to ask big government for permission, but they did anyway?” Colbert asked as a follow-up.

“Right,” Potter answered.

“What a bunch of p*ss**s ,” Colbert responded.

But Potter did acknowledge that IRS officials being found to have targeted tea party-related groups for extra scrutiny put the agency in a bad position, since it would invite extra pressure for it to approve more of their applications in the future. Colbert took that opportunity to file his own application.

“Can I file under a different name?” he asked Potter. “Because Colbert super PAC S.H.H. isn’t sufficiently tea party enough.”

Assured by Potter he could use another name for the application, Colbert went with “Making America A Better Tea Party Patriot 9-12 Place To Constitution America Tea Party Nominally Social Welfare Conservative Political Action Tea Party Secret Money Liberty I Dare You To Deny This Application Of America Tea Party.”

Watch Colbert’s latest plan unfold, as aired Monday on Comedy Central, below.
Colbert concludes tea partiers are ‘a bunch of ******* ’ after consulting his lawyer

I guess it's clear now how no laws were broken, and no "rights" were taken away. You can learn something from Comedy Central political satire.

posted May 22, 2013 01:26 PM            

The law allows Section 501(c)(4) organizations to self-declare and hold themselves out as tax-exempt; they do not have to obtain any approval from the Internal Revenue Service, though they may.[46]
http://en.wikipedia.org/wiki/501%28c%29_organization#501.28c.29.284.29
http://blogs.wsj.com/law/2013/05/16/the-surprisingly-muddled-history-of-the-501c4- exemption/

The code itself: http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_A,_Sec._1.501%28c%29%284%29-1

Thanks to this "scandal" Democrats are now calling for increased scrutiny for these organizations as:

(ii) Political or social activities. The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. Nor is an organization operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations which are operated for profit. See, however, section 501(c)(6) and §1.501(c)(6)–1, relating to business leagues and similar organizations. A social welfare organization that is not, at any time after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3) may qualify under section 501(c)(4) even though it is an action organization described in §1.501(c)(3)–1(c)(3)(ii) or (iv), if it otherwise qualifies under this section. For rules relating to an organization that is, after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3), see section 504 and §1.504–1.

posted May 22, 2013 01:28 PM            

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Originally posted by AcousticGod:
Nope.

The law allows Section 501(c)(4) organizations to self-declare and hold themselves out as tax-exempt; they do not have to obtain any approval from the Internal Revenue Service, though they may.[46]
http://en.wikipedia.org/wiki/501%28c%29_organization#501.28c.29.284.29
http://blogs.wsj.com/law/2013/05/16/the-surprisingly-muddled-history-of-the-501c4- exemption/

Thanks to this "scandal" Democrats are now calling for increased scrutiny for these organizations as at least half of the money collected by these organizations is supposed to be used in service to the community.

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Passion, Lust, Desire. Check out my journal

posted May 22, 2013 01:41 PM            

This is why I think your political inclinations are absurd. When faced with absolute fact, you try to make it out as if it's NOT fact. That's ridiculous. If you are presented with a FACT, you should embrace it. Don't allow your wishes and desires to color what is actually concretely real.

How many times, and in how many different ways do people have to encourage you to broaden your field of vision before you do it? It's not hard. All it takes is that little bit of mutable energy to think, "I may not be right," and you're there. Then information can come in, and you can judge it with fresh, unbiased eyes.

posted May 22, 2013 02:20 PM            

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Originally posted by AcousticGod:
Ami, this isn't twisting things.

This is why I think your political inclinations are absurd. When faced with absolute fact, you try to make it out as if it's NOT fact. That's ridiculous. If you are presented with a FACT, you should embrace it. Don't allow your wishes and desires to color what is actually concretely real.

How many times, and in how many different ways do people have to encourage you to broaden your field of vision before you do it? It's not hard. All it takes is that little bit of mutable energy to think, "I may not be right," and you're there. Then information can come in, and you can judge it with fresh, unbiased eyes.

I posted some of the places where you can find this information on your own.

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I think you are genuine. I don't think you live to put on a fake face as some people on here do. I think you believe what you do but I think you see it totally twisted.

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Passion, Lust, Desire. Check out my journal

posted May 22, 2013 02:39 PM            

It's not incorrect. The IRS answered Republican Orrin Hatch's letter. Look at my link [46].

"The law allows section 501(c)(4) organizations to self-declare and hold themselves out as tax-exempt."

It couldn't be any clearer.

You should contact the IRS and ask.

Once again, Ami, I am not twisting facts. That is most outrageously opposite of what I have done. I have reported FACTS correctly.

Questions and Answers on 501(c) Organizations

May 15, 2013

The IRS has received a variety of questions related to the exempt organization issues recently raised. Here are some basics on the issue.

1. What are the issues raised in the recent Treasury Inspector General for Tax Administration (“TIGTA”) report?

The issues relate to the application process for organizations seeking tax-exempt status. Part of the IRS’s responsibility is to review applications of organizations seeking tax-exempt status. Section 501(c)(3) organizations are required to get IRS approval. Others, including section 501(c)(4) organizations, are not required to get IRS approval, but often seek it. http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-501%28c%29-Organizations

posted May 22, 2013 04:26 PM            

Another provision, 26 U.S.C. § 170, provides a deduction, for federal income tax purposes, for some donors who make charitable contributions to most types of 501(c)(3) organizations, among others. Regulations specify which such deductions must be verifiable to be allowed (e.g., receipts for donations over $250). Due to the tax deductions associated with donations, loss of 501(c)(3) status can be highly challenging to a charity's continued operation, as many foundations and corporate matching programs do not grant funds to a charity without such status, and individual donors often do not donate to such a charity due to the unavailability of the deduction.

Testing for public safety is described under section 509(a)(4) of the code, which makes the organization a public charity and not a private foundation,[17] but contributions to 509(a)(4) organizations are not deductible by the donor for federal income, estate, or gift tax purposes.

The two exempt classifications of 501(c)(3) organizations are as follows:[18]

A public charity, identified by the Internal Revenue Service (IRS) as "not a private foundation," normally receives a substantial part of its income, directly or indirectly, from the general public or from the government. The public support must be fairly broad, not limited to a few individuals or families. Public charities are defined in the Internal Revenue Code under sections 509(a)(1) through 509(a)(4).

A private foundation, sometimes called a non-operating foundation, receives most of its income from investments and endowments. This income is used to make grants to other organizations, rather than being disbursed directly for charitable activities. Private foundations are defined in the Internal Revenue Code under section 509(a) as 501(c)(3) organizations, which do not qualify as public charities.

Before donating to a 501(c)(3) organization, a donor may wish to review IRS Publication 78, which lists organizations currently exempt under 501(c)(3).[19] Donors may also verify 501(c)(3) organizations on the web-based, searchable IRS list of charitable organizations[20] as well as on lists maintained by the states, typically on states' Departments of Justice websites. Churches, however, have specific requirements to obtain and maintain tax exempt status; these are outlined in IRS Publication 1828: Tax guide for churches and religious organizations.[21] This guide clearly outlines activities allowed and not allowed by churches under the 501(c)(3) designation. A private, nonprofit organization, GuideStar, also provides reputable and detailed results for web-based searching to verify information on 501(c)(3) organizations.[22]

Consumers may file IRS Form 13909 with documentation to complain about inappropriate or fradulent (i.e., fundraising, political campaigning, lobbying) activities by any 501(c)(3) tax-exempt organization.[23]

Obtaining status

The basic requirement of getting tax exempt status is that the organization is specifically limited in powers to purposes that the IRS classifies as tax exempt purposes. Unlike for-profit corporations that benefit from broad and general purposes, non profit organizations need to be limited in powers to function with tax exempt status, but a non profit corporation is by default not limited in powers until it specifically limits itself in the articles of incorporation and/or nonprofit corporate bylaws. This limiting of the powers is crucial to obtaining tax exempt status with the IRS and then on the state level.[24] You acquire 501(c)(3) tax exemption by filing IRS Form 1023. The form must be accompanied by a $850 filing fee if the yearly gross receipts for the organization are expected to average $10,000 or more.[25][26] If yearly gross receipts are expected to average less than $10,000, the filing fee is reduced to $400.[25][26] There are some classes of organizations that automatically are treated as tax exempt under 501(c)(3), without the need to file Form 1023:

posted May 22, 2013 04:31 PM            

501(c)(4) organizations may inform the public on controversial subjects and attempt to influence legislation relevant to its program[37] 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.[38] 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.[39] 501(c)(4) organizations are not permitted direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.[36]

Contributions to 501(c)(4) organizations are usually not deductible as charitable contributions for U.S. federal income tax, with a few exceptions.[40] 501(c)(4) organizations are not required to disclose their donors publicly.[41]

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.[42][43] Criticized as "dark money," spending from these organizations on political TV ads has exceeded spending from Super PACs.[44][45]

The law allows Section 501(c)(4) organizations to self-declare and hold themselves out as tax-exempt; they do not have to obtain any approval from the Internal Revenue Service, though they may.[46]

posted May 22, 2013 05:14 PM            

quote:

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Originally posted by Randall:
Bottom line: If you want large contributors, you need to be tax deductible, which means 501(C)(3) and means you must be IRS approved. A 501(C)(4) is self-declared exempt, but being tax exempt does not mean donations are tax deductible.

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Yes, I was on the Board of directors for a Messianic synagogue which got tax exempt status. I went to the paralegal and did the thing, so Randall is right.

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Passion, Lust, Desire. Check out my journal

posted May 22, 2013 05:58 PM            

We're not talking 501(c)(3) organizations. We're talking 501(c)(4) organizations. I am right. I was right from the start.

It's always frustrating when someone posts a bulk of non-essential information in trying to make his/her case.

Here's what you need to know about 501(c)(3) organizations:

Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes. http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/The-Restriction-of-Political-Campaign-Intervention-by-Section-501%28c%29%283%29-Tax-Exempt-Organizations

Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. http://www.irs.gov/publications/p557/ch02.html#en_US_2011_publink1000199916

(Honestly, it's hard for me to comprehend that you'd think I wouldn't have my bases covered. It must be the sense that my three Sagitarrian placements are in play, and are in some way missing details. I would think that with the LONG history I have here, some knowledge of my ability to research things would have come through. If I say something is one way, and you disagree, you're better off checking your work. Not that I don't appreciate people checking my work, and keeping me on my toes, but when I quote the IRS directly...how could there even be an assumption that I'm wrong. I mean really...)

So 501(c)(3) organizations are NOT what we're talking about. We're talking about tax exempt organizations that are legally allowed to participate in politics: 501(c)(4):

Political activity. Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, if you submit proof that your organization is organized exclusively to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. See the discussion in chapter 2 under Political Organization Income Tax Return. http://www.irs.gov/publications/p557/ch04.html#en_US_2011_publink1000200291

quote:

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Bottom line: If you want large contributors, you need to be tax deductible, which means 501(C)(3) and means you must be IRS approved.

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Nope.

quote:

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A 501(C)(4) is self-declared exempt, but being tax exempt does not mean donations are tax deductible.

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Correct.

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It couldn't be any clearer.

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So, if it was clear, why the confusion?

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Yes, I was on the Board of directors for a Messianic synagogue which got tax exempt status. I went to the paralegal and did the thing, so Randall is right.

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Nope. Randall was wrong.

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And if you, in fact, made that mistake, AG, don't despair. You can't always be right all of the time. Remember...I thought Georgia was a Democratic state!

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