May 13, 2013
WHICH RAISES THE QUESTION...:
Explosion of Political Groups Seeking Tax-Exempt Status May Have Led to IRS Scandal (DANIELLE KURTZLEBEN, May 13, 2013, US News)
[T]o target a group for being political, in whatever way, may be a smart IRS policy, and some experts believe the agency should do more of it, or at least clarify how it does these investigations.That's because the types of groups the IRS was targeting also fall under the heading of so-called "social welfare" organizations, which can obtain tax-exempt, 501(c)(4) status. The IRS states that these organizations may participate in political activities, so long as they are "organized exclusively to promote social welfare." That creates a hazy zone of political activity: according to the Center for Responsive politics, 501(c)(4) organizations "may engage in political activities, as long as these activities do not become their primary purpose."Deciding exactly which groups fall into that definition is a tricky business."It's a very blurry line, and it's very hard to determine," says George Yin, professor of law and taxation at the University of Virginia School of Law. "There's a balance, and political activity and advocacy would tend to remove you from eligibility in that category."In that sense, an IRS official may see the words "Tea Party" on an application for tax-exempt status and be justified in investigating further, believing the Tea Party to have political associations, as its words and deeds would suggest. Examining groups that appear blatantly political is good policy, says Yin.
...of whether taxing primarily political activity is consistent with the First Amendment. Given normal rules of textual construction, only political speech should be protected by the free speech amendment, so it ought not be taxable.
Posted by Orrin Judd at May 13, 2013 6:27 PM
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