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Posts tagged ‘IRS’

Bridge-gate Getting Much More Press Than Obama Scandals.


Image: Bridge-gate Getting Much More Press Than Obama Scandals

By Lisa Barron

Just two days after news broke of politically motivated traffic jams in New Jersey, the mainstream media has already given the story far more airtime than it has given to the Obama administration’s IRS scandal.

The Media Research Center has found that the three networks have devoted 17 times more coverage to Bridge-gate than they have allowed in the last six months for the controversy over the Internal Revenue Service’s targeting of conservative groups.

“This is media bias,” former New York City Mayor Rudolph Giuliani said on Fox News’“Fox & Friends” Friday when asked about the report.

“If it’s a story involving a Republican that they can in any way make negative, they exaggerate it tremendously. If it’s a story involving a Democrat who they like — of course they love President Obama — they give it as little attention as possible. This is a perfect example of it,” he said.

A prominent GOP fundraiser agreed, telling Politico that Christie is getting blasted for standard “political activities” by a partisan media. “Obama had the IRS investigate GOP-ers and media yawned. That’s a crime. This is silly,” he said.

Indeed, the Wall Street Journal editorial board wrote on Friday, “Republicans operate under a double media standard that holds them to a much lower scandal threshold. In that sense, the pathetic New Jersey traffic-lane scandal may be, as Mr. Obama likes to say, a teachable moment.”

Many in fact, contrasted the New Jersey governor’s decisive response to the controversy to the president’s failure to take action or responsibility for his administration’s missteps.
“The real question is does a leader own up to it and handle it correctly,” said Giuliani on Fox. “In the case of Obama, he has yet to own up to the IRS scandal. In this case, Chris Christie acted the way a leader has to act.”

“He was sincere and decisive. He apologized, fired people, and promised to make changes. He said the buck stopped at his desk,” Fox Business News host and analyst Charles Payne wrote in his Wall Street Commentary newsletter.

“We haven’t been able to say the same thing, when it comes to President Obama, whose litany of scandals are always met with a strategy of circling the wagons, and deflecting blame; no apologies and no accountability,” he said.

As the Wall Street Journal noted, “Lois Lerner, who ran the IRS tax-exempt shop and took the Fifth before Congress, was allowed to ‘retire,’ presumably with a pension. Acting IRS Commissioner Steven Miller resigned under pressure but no other heads have rolled.”

Meanwhile, with Christie’s political future still the subject of much debate, some Republicans say that the way he handled Bridge-gate could work to his advantage.

“This will be, at the end of the day, a political benefit to Chris Christie,” GOP strategist Steve Schmidt,” told The Washington Post, adding, “This sends a very clear signal: If you screw up, you violate the public trust, there’s not going to be an exercise in wagon-circling — there’s going to be an exercise in accountability.”

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Giuliani: Christie Holds People Accountable, Obama Doesn’t.


Rudy Giuliani praised New Jersey Governor Chris Christie Friday for firing the aides responsible for the so-called bridge-gate fiasco, saying he did what President Barack Obama “finds impossible to do” — hold people accountable.

“He explains it. And, here he does something that the Obama administration finds impossible to do. He held people accountable for it. He actually fired them,” the former New York Mayor said of his fellow Republican on “Fox & Friends.”

“All you have to do is contrast it with Benghazi, the IRS scandal. The way they obfuscate. They hide. The way they never have press conferences,” he added, referring to the Obama administration.

Giuliani called Christie’s apology for the shutdown of traffic last year across the George Washington Bridge connecting New York and New Jersey caused by his aides as “refreshing.” Not many politicians would have dealt with such a controversy by hold a full-blown press conference and giving “definitive answers. He said it was “exactly the opposite of what we have in the White House right now.”

“We’ve spent the last three or four years trying to figure out why President Obama never explains things. Is never transparent. Is never direct. Always seems to be leading from behind, which is, of course, following.

“Now we have an example of the opposite, a guy who gets out front and leads and tells the truth,” Giuliani said of the governor who is viewed as a major contender for the presidency in 2016.

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By Wanda Carruthers

FBI Finally Contacts Conservative Groups in IRS Targeting.


Image: FBI Finally Contacts Conservative Groups in IRS Targeting

 

By Sandy Fitzgerald

The FBI is contacting some conservative groups that were targeted by the Internal Revenue Service as calls heat up for a key Justice Department investigator to step down from the probe after questions about her donations to President Barack Obama’s presidential campaigns.

A lawyer working with some of the tea party groups told The Washington Times that a “small number” of his clients were recently contacted, albeit seven months after the investigation was to begin.

“After seven months of no contact from federal investigators, a small number of our clients recently received a request for an interview from the FBI,” said Jay Sekulow, chief counsel for the American Center for Law & Justice, which represents more than three dozen of the organizations.

Cleta Mitchell, another attorney representing some of the targeted groups, said her clients have not heard from investigators.

“Normally, don’t you first interview the victims?” Mitchell said. “I mean, I’ve watched enough cop shows over the years. You interview the victims. You don’t interview the perp.”

Republicans, though, say the whole investigation is under question following the selection of Justice Department attorney Barbara Kay Bosserman to lead the probe. Bosserman donated more than $6,000 to the president’s campaigns, and Republicans say she cannot be impartial.

House Speaker John Boehner said he is concerned by the Obama administration’s many obstructions on not only the IRS investigation, but many other issues.

“The administration has not been forthcoming with regard to the IRS investigation,” the Ohio Republican said. “Furthermore, they’ve not been forthcoming when it comes to the Benghazi investigation or Fast and Furious. And the administration can try to stonewall as much as they want, but these issues are not going to go away. The American people have a right to know the truth. And for the administration that came in five years ago promising to be the most transparent administration in history, they’ve got a very poor record.”

Meanwhile, Kentucky Republican Sen. Rand Paul called for independent investigations into the IRS scandal.

“They say the fox isn’t good to guard the henhouse; the fox is probably not good to investigate the henhouse, either,” Paul said Thursday. “I think these investigations need to be done by independent people outside of the administration.”

Last spring, Attorney General Eric Holder ordered an FBI investigation after it was revealed the IRS had been targeting conservative groups for additional scrutiny and delaying tax-exempt status for hundreds of groups’ applications.

However, not much has been done with the investigation since that time, and House Oversight and Reform Committee Chairman Darrell Issa and co-chair Rep. Jim Jordan, R-Ohio, complained last month that the committee still has not gotten related documents.

While the FBI rejected many of Issa’s demands for documents, he learned Bosserman was leading the investigation for the Justice Department, and on Wednesday he and Jordan sent a letter to Holder saying her selection tainted the entire investigation.

The Justice Department says federal law and policy prevents it from denying assignments based on an employee’s political views, and doing so violates workers’ rights right to participate in the political process, The Washington Times reports.

Sekulow said his firm’s clients are evaluating FBI’s requests, but Bosserman’s political leanings “create a serious conflict of interest and raises more questions and doubts about the Obama administration’s promise to get to the bottom of what happened.”

The FBI refused comment, pointing to a letter sent on Dec. 31 by Stephen Kelly, assistant director for the agency’s office of congressional affairs.

“We would request that the committee permit the investigators to complete their investigation and consult with federal prosecutors, as appropriate, to determine whether the evidence reveals a prosecutable violation of any statutes within our jurisdiction,” said Kelly. “As a result, we cannot provide the documents requested at this time while the criminal investigation is active and ongoing.”

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Donors Look for Alternatives to Skirt IRS Rules for Political Fundraising.


As the IRS moves to limit campaign fundraising by nonprofit groups, lawyers are looking for new ways to enable donors to continue to pour money into elections while remaining anonymous.

According to the Wall Street Journal one option being considered is the creation of taxable, for-profit businesses which would be used as campaigning vehicles. Another idea involves donors banding together in trade associations. Neither type of group is required to disclose their members.

In November, the IRS proposed new rules to limit political activity by social-welfare groups, known as 501(c)(4) groups, whose influence on political campaigns has skyrocketed in the last two years, partially because donors can contribute unlimited amounts on an anonymous basis.

“They’ve become the hot trend over the last year or so,” Robert Kelner, head of the political law group at Covington & Burling LLP, said of the for-profit vehicles, according to the Journal. “It’s a trend that is accelerating, and the new proposals are going to put more steam behind the train.”

A 2010 Supreme Court ruling allowed for companies to spend unlimited amounts of money to support or oppose candidates. These organizations are not required to report their activities to the Federal Election Commission since they are not seeking tax-exempt status.

Unlike political action committees, these entities, such as the Democratic firm Catalist and the GOP group called America Rising, do not have to disclose donors, clients, or spending and can work directly with political campaigns, though they are required to pay taxes on any profits. Even then, election-law specialists say those requirements can be minimized or possibly eliminated depending on how a company is structured, according to the Journal.

“The arrival of these taxable, for-profit entities in the political arena will make it increasingly difficult to distinguish political-consulting firms from advocacy groups,” Kelner said.

At the same time, companies must be able to demonstrate they have a legitimate business purpose other than campaign activity to avoid being defined by the IRS as a PAC. Many already do, saying they are providing services for a price, such as polling, consulting, and advertising.

“Are you just a political committee parading around as something other than a political committee?” Kenneth Gross, former associate general counsel of the FEC, and now at Skadden, Arps, Slate, Meagher & Flom LLP, told the Journal. “That can be pierced either by FEC or IRS, depending on the nature of the entity.”

Meanwhile, political trade associations and charities, known as 501(c)(6) groups, similar to the U.S. Chamber of Commerce, are also finding ways of raising huge sums on an anonymous basis. The IRS has already hinted it may institute new rules to regulate these types of groups for their role in campaigning.

“If the IRS fails to act, Americans should expect to see an increase in the number of so-called ‘business leagues’ created to funnel money into our elections while cloaking the identities of their donors,” Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics, told the Journal.

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© 2013 Newsmax. All rights reserved.

By Melanie Batley

Obama Uses IRS to Eliminate His Enemies.


President Obama
President Obama

“The power to tax involves the power to destroy,” the Supreme Court wrote in 1819, shortly after America began.

Now in 2013, President Barack Obama is launching a frightening attack on free speech, using one of the most-feared agencies in all the federal government: the Internal Revenue Service.

One of the most roundly condemned aspects of Richard Nixon’s malfeasance in office was his use of the IRS to target his political enemies with audits. If people shudder at Nixon’s abuses with the IRS, what Obama is doing should drive them to convulsions.

Obama seeks to silence dissenting voices with unprecedented new regulations to curtail political speech by nonprofit organizations. These new rules would help silence conservative organizations and Obama’s critics and raise serious First Amendment concerns, as these rules look like the federal provisions struck down as unconstitutional by the Supreme Court in its famous Citizens United case.

Congress allows for various types of organizations to organize as nonprofit, revenue from which is not subject to corporate federal income tax. For example, fundamentally charitable or educational nonprofits—such as churches—are 501(c)(3) organizations, contributions to which are also tax-deductible by the donors.

Some groups are 501(c)(5) organizations. These are political action committees (PACs), which endorse candidates for office and devote their resources to advancing or defeating certain candidates.

Then there are 501(c)(4) organizations. These are social welfare organizations, dedicated to advancing certain issues or viewpoints they believe promote “the common good and general welfare.” These nonprofits can devote much of their resources to political activity, so long as politics is not the group’s “primary purpose.”

It’s always been assumed that less than 50 percent would be devoted to pure politicking, but no one knows because the law does not specify. Also—conveniently—the tax code fails to define the term “political activity.”

On Nov. 26, the Treasury Department and IRS announced new regulations “regarding qualification requirements for tax-exemption as a social welfare organization,” that is, 501(c)(4) organizations. TheIRS then goes on to specify what sorts of activities will henceforth be regarded as political activity, including but not limited to:

  • Any message expressing approval/support or disapproval/opposition to any candidate for public office. For example, an ad saying, “Thank Senator Smith for supporting our troops.”
  • Within 60 days of a general election or 30 days of a primary election, any mention by name of any candidate or showing his picture, even without expressing approval or disapproval.
  • Any money given by a 501(c)(4) to a 527 organization, which citizens may give, however much of their personal money they want to promote public issues they personally support.
  • Voter registration drives.
  • Voter guides that inform citizens of where politicians stand on various issues.
  • Any event within 60 days of an election at which a candidate makes an appearance.

The impact of such regulations would be far-reaching. Groups such as the National Rifle Association and its political affiliate, NRA-ILA, are 501(c)(4) organizations. Imagine if NRA-ILA could not spend much of its resources discussing issues and legislation or informing voters of where candidates stand on gun rights issues. Now imagine those restrictions imposed on the major organizations of every public issue in America.

Less than four years ago, in Citizens United v. FEC, the Supreme Court struck down as unconstitutional provisions of the McCain-Feingold campaign-finance law that made it a crime for organizations to speak about candidates within 60 days of a general election or 30 days of a primary. The Obama administration claimed the authority to ban even books, if a 600-page book mentioned a candidate even once on its pages.

The Court held that these restrictions violated the First Amendment. Yet these new IRS rules closely track those invalidated provisions.

In some respects, these restrictions go even further than the ones struck down by the court. Previous restrictions only applied to candidates for federal office. The new IRS rules would also apply to every candidate for state and local elections. Thus, criticizing your county dog catcher could land your organization in hot water with the IRS, even if the dog catcher election is vitally relevant to the social welfare interests of your nonprofit group, such as a group called Citizens for Safe Dog Catching.

In our 2010 book, The Blueprint, we discussed how free speech is the essential lifeblood of public debate, empowering voters to make a thoughtful and well-considered choice at the ballot box. We also warned that Obama might create laws to silence his political opponents, using the same Chicago-style political tactics he knew from his days as an Illinois politician, like a couple rough-looking thugs built like brick walls who muscle their way around your storefront to send you a message that you’d better quiet down if you know what’s good for you and your business.

The Supreme Court restored free speech for average citizens in Citizens United. Shortly thereafter, President Obama demeaned his high office by denouncing the Supreme Court to the justices’ faces during the 2010 State of the Union address on national television before a joint session of Congress. Obama later promised to find ways to get around the Citizens United decision.

That is what the IRS is doing here—limiting how much groups can speak about Obama’s policies or promote alternative policies about health care, free markets, traditional values or national defense. Obama and his supporters can use the enormous platform of their public offices to promote whatever they want without limit. If the president gives a speech, the media will cover it.

But if a group of citizens wants to pool their resources to express an opposing viewpoint before an election, that group can lose its tax-exempt status. Unlike the law struck down in 2010, it will not be a federal felony.

But while its bite isn’t as deep, the reach is much broader. It serves to choke off funding and impair the ability of those groups to participate in the democratic process.

The solution to political speech you don’t like is to offer opposing speech; the cure for bad speech or wrong speech is more speech, not less. That free exchange of ideas is the blood flowing through the veins of a free society, so that voters can fully hear both sides. When you stop that flow, you stop the beating heart of democracy.

Source: CHARISMA NEWS.

KEN BLACKWELL AND KEN KLUKOWSKI

Ken Blackwell is senior fellow of family empowerment, and Ken Klukowski is director of the Center for Religious Liberty at Family Research Council. This article appeared on Breitbart.com on Dec. 2, 2013.

Obama’s IRS Moves to Close Down Political Speech of Nonprofits.


Image: Obama's IRS Moves to Close Down Political Speech of Nonprofits

By Todd Beamon

The Obama administration moved on Tuesday to rein in the use of tax-exempt groups for political campaigning.

The effort is an attempt to reduce the role of such loosely regulated yet influential super PACS as Crossroads GPS, which was co-founded by GOP political strategist Karl Rove, and Priorities USA, which ran searing ads against rivals of President Barack Obama to support his re-election last year.

Urgent: Do You Approve Or Disapprove of President Obama’s Job Performance? Vote Now in Urgent Poll 

The Internal Revenue Service and the Treasury Department proposed new rules that they said would prohibit such groups from using “candidate-related political activity” like running advertisements, registering voters or distributing campaign literature as activities that qualify them to be tax-exempt “social welfare” organizations.

“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by tax-exempt social welfare organizations,” said Mark Mazur, the Treasury’s assistant secretary for tax policy. “We are committed to getting this right before issuing final guidance that may affect a broad group of organizations.

“It will take time to work through the regulatory process and carefully consider all public feedback as we strive to ensure that the standards for tax-exemption are clear and can be applied consistently,” Mazur said.

The rules would become final after a lengthy comment period, the federal agencies said, giving the super PACS ample time to raise millions of dollars from anonymous donors before next year’s congressional elections.

Conservative groups bitterly attacked the proposed rules, charging that they represented yet another attack on free speech by the Obama White House.

“This is a feeble attempt by the Obama administration to justify its own wrongdoing with the IRS targeting of conservative and tea party groups,” Jay Sekulow, a lawyer representing more than three dozen of the groups in a federal lawsuit against the tax agency, told The New York Times.

The lawsuit stemmed from the IRS’ monitoring of tea party, conservative, and religious groups for extra scrutiny in their applications for tax-exempt statusA Treasury Department inspector general disclosed in May that the agency was doing the special screenings for those groups seeking 501(c)(4) status.

The status allows such organizations to keep their donors private.

The IRS screening had occurred between 2010 and through the 2012 presidential election. During the period, IRS agents had placed groups with words like “tea party and “patriot” in their names on a “be on the lookout” — or BOLO — list for additional screening of its applications for the tax-exempt status.

“Unfortunately, it appears that the same bureaucrats that attempted to suppress the speech of conservative groups in recent years has now put together new rules that apply to (c)4 groups but do not apply to liberal groups like labor unions,” Nick Ryan, founder of the American Future Fund, told the Times.

The organization spent at least $25 million on political advertising last year, according to the Times.

“I wish I could say I am surprised,” Ryan added, “but I am not.”

As 501(c)(4) organizations, the groups can raise millions of dollars to influence elections.
They can, however, also be small-scale tea party groups — many had contended that the were singled out by the IRS.

House Ways and Means Committee Chairman Dave Camp questioned the White House’s decision.

“There continues to be an ongoing investigation, with many documents yet to be uncovered, into how the IRS systematically targeted and abused conservative-leaning groups,” the Michigan Republican said. “This smacks of the administration trying to shut down potential critics.”

In 2010, the U.S. Supreme Court in its Citizens United decision lifted the limits on donations by labor unions and companies to 501(c)(4) groups. This allowed Crossroads, the largest of them, to raise large sums outside the limits that apply to candidates’ campaigns and traditional party committees.

“Enormous abuses have taken place under the current rules, which have allowed groups largely devoted to campaign activities to operate as nonprofit groups in order to keep secret the donors funding their campaign activities,” said Fred Wertheimer, president of Democracy 21, which advocates limits on money in politics.

Under current rules, “social welfare” groups may conduct some political work as long as it does not remain their primary activity. The proposed rules would block such activities as running ads that “expressly advocate for a clearly identified political candidate or candidates of a political party” as fulfilling their tax-exempt mission.

In addition, spots that simply mention a politician in urging a certain way to vote — for instance — could not be run 60 days before a general election or 30 days before a primary.

The rules also would limit voter drives and voter registration efforts and the distribution of literature.

According to the federal agencies, the new rules seek to solidify the current regulations, which are confusing and prone to abuse.

“Depending on the details, this could be dramatic,” Marcus Owens, a former chief of the IRS’ exempt organizations division, told the Times.

Treasury and the IRS do not yet have a proposal about what specific proportion of a 501(c)(4) group’s activities must promote social welfare and are soliciting input. Essentially, they do not have a recommendation as to what percentage of a group’s time and money can be spent on politics.

Representatives of both Crossroads and Priorities USA declined to comment to the Times on the proposed rules. The groups, however, are expected to weigh as the process moves forward.

Any changes to the regulations likely would not affect the 2014 elections because of legal challenges, but the rule changes could shape the next presidential election, said Kenneth Gross, a campaign finance attorney and former head of enforcement for the Federal Election Commission.

“Brightening what are now blurred lines — what is political activity — is not only useful but necessary to have some kind of clarity to a vehicle that has been used to the tune of millions and millions of dollars,” he said.

But Gross cautioned that “this is a long and winding road before anything is in ink.”

The Associated Press contributed to this report.

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© 2013 Newsmax. All rights reserved.

Proposed IRS Rule Change Splits Leaders of Key House Panel.


Image: Proposed IRS Rule Change Splits Leaders of Key House Panel

By Todd Beamon

Proposed changes in how the IRS evaluates the political activity of 501(c)(4)social welfare” groups have split the top two members of the House Ways and Means Committee — and they represent the same state.

The committee chairman, Republican Rep. Dave Camp of Michigan, said on Tuesday that the Obama administration should not issue the new guidelines, Roll Call reports.

“This smacks of the administration trying to shut down potential critics,” Camp said.

He was referring to those who have attacked the IRS for singling out tea party, conservative, and religious groups for special scrutiny in their applications for 501(c)(4) status.

The status allows the organizations to keep their donors private. Such groups spent “tens of millions” of dollars in the last election, Roll Call reports.

“There continues to be an ongoing investigation, with many documents yet to be uncovered, into how the IRS systematically targeted and abused conservative-leaning groups,” Camp said, according to Roll Call.

“Before rushing forward with new rules, especially ones that appear to make it harder to engage in public debate, I would hope Treasury would let all the facts come out first — something they could achieve by fully cooperating with Congress in the investigation.”

But the panel’s ranking Democrat, Sandy Levin, who also represents the Wolverine State, called the proposed rules “a good first step,” Roll Call reports.

“As we plainly saw in the investigations into the failings within the IRS tax-exempt division, the lack of clear guidance on defining and measuring political activities under current law led to mismanagement and delays in the processing of exemption applications from progressive and conservative organizations,” Levin told Roll Call.

“The proposal for a ‘candidate-related political activity’ is a reasonable starting place, but the details will be important, for example, in an area as critical as voter registration drives,” Levin said.

At issue is whether an organization may obtain tax-exempt status through promoting the “social welfare.”

Political groups have loosely interpreted the IRS rules to participate in a wide range of political activities, ranging from educating voters to coaching potential candidates for office, Roll Call reports.

The proposed new guidelines, however, would bar organizations seeking the exempt status from “candidate-related political activity.”

Levin called the work of 501(c)(4) groups “vital in communities across the country,” adding that it was “important that there be clear guidelines between promoting social welfare and engaging in political activity for organizations seeking this tax exemption.”

The Democrat said the proposed changes would help remove the “ambiguity” from the current IRS evaluation system, Roll Call reports.

Acknowledging that “gross mismanagement of the tax-exempt division” had occurred, Levin said clearer guidelines were needed to prevent future mistakes, Roll Call reports.

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IRS Enforcement Could Decide Success or Failure of Obamacare.


Image: IRS Enforcement Could Decide Success or Failure of Obamacare

IRS Commissioner Danny Werfel

By Melissa Clyne

For Americans who choose not to buy health insurance the tax man probably won’t be coming anytime soon, The Washington Post reports.

Politicians, pundits and the press have been crying foul about Obamacare’s myriad failures since its Oct. 1 launch, but it turns out much of the program’s success or failure will ultimately lie with the IRS, the agency responsible for fining Americans who don’t buy health insurance.

The lawmakers who drafted the Affordable Care Act, known as Obamacare, hog-tied the IRS in its ability to collect fines for the uninsured — $95 in 2014 or 1 percent of income, whichever is greater. The IRS is barred from usual penalties such as liens, foreclosures and criminal prosecution. Its only remedy is to garnish tax refunds for those who over paid their taxes, according to the Post.

“Most people who really want to game the system will probably get away with it,” writesForbes contributor Howard Gleckman, who characterizes the tax as a “mouse.”

Enforcing compliance with the law is one of the IRS’ nearly four-dozen new responsibilities resulting from Obamacare. The 2,400-page legislation mandates that every American carry at least “minimum essential coverage.”

Health economists warn that if the young and healthy don’t participate, an “insurance death spiral” will result in skyrocketing costs and premiums to cover the sick and elderly.

Weak enforcement will sink Obamacare, according to health-care industry consultant Robert Laszewski, president of Health Policy and Strategy Associates.

“I now think there is little hope we are going to get enough younger healthy people to sign up, and that means that this law is in grave danger of financial collapse,” he warned.

IRS Commissioner Danny Werfel insists his agency is prepared to take on its new responsibilities, which also include helping distribute trillions of dollars in insurance subsidies.

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Atheists Ask IRS to Tax Religious Groups.


 

Internal Revenue Service
Internal Revenue Service

Nonbelievers are challenging the Internal Revenue Service’s special exemptions for religiousorganizations in a federal court in Kentucky, saying churches and other religious groups should have the same financial rules as other nonprofit groups.

If they prevail, it will change the tax-exempt status of churches and other religious organizations, and require the same transparency of donors, salaries and other expenditures that secular nonprofits must currently meet.

“This is a very strong case,” said Dave Muscato, public relations director for American Atheists, a national advocacy group and lead plaintiff in the case. “It seems to be straight-up discrimination on the basis of religion.”

American Atheists is joined in the suit by Atheists of Northern Indiana and Atheist Archives of Kentucky. Oral arguments were heard Thursday in the U.S. District Court for the Eastern District of Kentucky in Covington.

The case centers around who must file IRS Form 990, an annual reporting statement that provides information on a group’s mission, programs and finances.

Current tax law requires all tax-exempt organizations to file a Form 990 financial report—exceptchurches and church-related organizations. A few state, political and educational organizations are exempt as well if their annual revenues fall below certain amounts.

This means the IRS treats religious organizations differently than it does all other organizations, the suit holds. It claims the IRS policy is a violation of the First Amendment and the due process promised under the Fifth Amendment.

IRS spokesman Anthony Burke said the agency’s policy is not to comment on pending litigation.

The suit argues that religious organizations receive preferential treatment because they do not have to withhold income tax from compensation to clergy, reveal staff salaries, or disclose the names of donors who give more than $5,000.

The plaintiffs allege that because they must reveal the names of major donors, they are hindered in the amount of money they can raise.

“We have donors who tell us, ‘I would like to give more than this but I don’t want people to know I am an atheist,’” Muscato said. “That is hurting us to be held to that different standard.”

The suit also alleges that, because religious organizations do not file Form 990, there is little proof that the organizations’ activities benefit the public and should therefore be tax-exempt. It holds that such “subsidization of religious entities” costs taxpayers $71 billion per year.

KIMBERLY WINSTON/RNS

IRS Approval for Many Conservative Groups Still Stalled.


It’s business as usual at the Internal Revenue Service, where officials tell USA Today 
that little has changed since Congress investigated the agency for targeting tea party groups for unnecessary delays.

Forty percent of the conservative groups caught up in the backlog remain in limbo, and new applications pending since May 2012 have not been considered.

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The Cincinnati office that handles tax-exempt status groups still faces a backlog, however some officials believe there has been a change in culture and the process improved since division director Lois Lerner and IRS Commissioner Steven Miller resigned.

“I’m quite sure they’re not going to go after tea party groups again,” said Paul Streckfus, editor of a trade journal focused on tax-exempt issues.

“The larger question is, is the system working better than it did? And the answer, as far as I can tell, is it’s not,” Streckfus said.

Congress began investigating the agency six months ago after it was revealed that 500 conservative and tea party groups waited years for approval, while some presented evidence that federal authorities demanded private and intrusive information about the groups.

Danny Werfel, the new IRS chief, has since banned the “Be on the Look Out,” or BOLO lists of certain words like “patriot” or “tea party” that were used to target right-leaning groups.

Marcus Owens, a Washington-based tax attorney and former director of the IRS’ exempt organizations division, said applications “don’t seem to be moving at all.”

“The IRS just isn’t saying anything to the public or even giving guidance to professionals in the tax field,” Owens said.

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By Audrey Hudson

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