Consider the case of the Super PAC American Crossroads. Last month American Crossroads misidentified the donor of $300,000 in its report to the FEC.
Instead of the donation being from the Glenmede Trust Company, the actual donors were Thomas and Sandra Sullivan, the parents of U.S. Senate candidate Dan Sullivan of Alaska.
I know nothing about the Sullivan family and little about the Alaska Senate race when compared to other races for the United States Senate.
I’m not suggesting that these parents do not have a right to donate money to any individual or group. They have that right. They also have a right to support their son, and I think the world would be a better place if parents supported their children and children supported their parents. I’m not talking about monetary or any other type of financial assistance when I use the term “support.”
While I personally am not a fan of Super PACs, at least they have to disclose donors. One issue, however, is that much of the donations are made by groups with 501(c)(4) status where donations to such groups can and often are anonymous.
I’ve written several pieces detailing the nuances concerning these tax exempt groups. Unless you have been fortunate enough to have spent the last few years in seclusion at some vacation paradise without any communication, you are most likely aware of some Congressional investigations into the IRS and these 501(c)(4) groups.
The IRS did “target” certain “conservative” groups. “Target” is placed in quotations because some of the scrutiny resulted from isolating key terms to pare down the number of applications, and some resulted from the vague and at times nonexistent descriptions of activities on the forms submitted.
Now my opinion is that all groups seeking this status should have been subjected to the same scrutiny as the targeted groups. Not all of these groups were “conservative” as the investigations are trying to promote. They common thread is not ideology, but that they are in fact political groups and not the social welfare groups as presented.
Regardless of ideology, political activities to me are not acts of charity. Groups engaging in political activities should not have tax exempt status. People often toss back that some churches and unions engage in politics so “what’s fair for them is fair for us.” I agree with the concept but believe that the way to level this playing field is that the political activities of an otherwise tax exempt organization should be taxed while the charitable activities are not. Of course that’s not a perfect solution, but it would even out advantages argued by both sides.
Reading about this latest story with American Crossroads made me think about a group denied its 501(c)(4) status which in my opinion was the correct decision.
Did you ever hear of Arkansans for Common Sense? According to their 990 Form, the organization’s mission was to “promote social welfare by educating the citizens of Arkansas on issues of public concern.”
The IRS denied this group its tax exempt status for the following reason:
“You are not primarily operated for the promotion of social welfare of the people of the community because your primary activities are the participation in a political campaign on behalf of or in opposition to a candidate for public office.”
The IRS decided that the $1.3 million spent by the group was primarily intended to aid in the reelection of US Senator Blanche Lincoln Democrat from Arkansas. Lincoln also served in the House before her election to the Senate.
Opponents labeled Arkansans for Common Sense as a “liberal” group.
To illustrate the oppression that these 501(c)(4) groups are under by the IRS, look at the letter sent to Arkansans for Common Sense stating that their appeal to have tax exempt status had been denied along with the earlier correspondence.
Look at their 990 Form
Look at their FEC Form 5: Report of Independent Expenditures Made and Contributions Received
How dare any group, especially a poor group spending a paltry $1.3 million, be subjected to such cruel and unusual punishment such as providing this type of financial information to the IRS?
Seriously, according to some political campaigning is social advocacy. Organizations and corporations have the right to free speech and making anonymous financial donations in amounts per election cycle greater than the amounts some municipalities and businesses have for years is the American way.
Which rights are being suppressed? It seems to me that Congress isn’t worried about free speech with these Congressional hearings. They don’t seem worried about how convoluted the tax code is. They don’t seem worried that an individual like you or me might be chosen for one of those random audits. Years ago the IRS certainly made great usage of time and resources when several of us graduate students were selected for random audits. The teaching assistantships did pay our out of state tuitions, but our salary? Thankfully I like canned pork and beans, and they went on sale every month. Fortunately a lot of lazy people littered, and I had a stick with a nail and a sack to collect aluminum cans tossed into the ditches along this back stretch of road. Selling those cans at the scrapyard kept gas in my truck, and I had time to recite bibliography in my head.
Those audits were ridiculous, but I don’t think they were suppressive or oppressive. For groups having millions of $ donated to them, however, I can see why questions are outrageous.
Anyone can label it as they wish but it’s money and not free speech, and that applies to “conservative,” “liberal,” or just about anyone I reckon who wants to get the ear of their elected representatives to Washington or any state house.