Tax exempt Feed

What did we learn during IRS Commissioner John Koskinen's appearance today before the House Oversight and Government Reform Committee? First, real witnesses aren't necessary. Koskinen was making his first visit before the Oversight panel to discuss how the Internal Revenue Service previously handled and is now dealing with applications for 501(c)(4) nonprofit status. Just in case you have 3½ hours and want to watch the fireworks yourself. The new IRS chief was treated the same way as most other witnesses on this topic have been. He was asked long, politically-tinged questions and then, for the most part, was not allowed... Read more →

We didn't learn anything new about how the Internal Revenue Service used to handle 501(c)(4) applications at the contentious Congressional hearing this week, but since its dramatic ending, things have changed. In case you missed the hearing, Lois Lerner was back before the House Oversight and Government Reform Committee as it continued its investigation into the IRS' questionable tactics in reviewing applications for that favorable tax-exempt status. The quick recap is that Lerner showed up but once again took the Fifth and didn't testify. An irked Rep. Darrell Issa (R-Calif.), chair of the committee, ended the hearing early and abruptly.... Read more →

Tempers flare at IRS hearing. Reality show, anyone?

A couple of U.S. Representatives have stumbled across a way for Uncle Sam to raise more revenue without worrying about raising anybody's taxes. Just turn the halls of Congress into a reality show. I know, there's C-SPAN. I'm a big fan of the public affairs channel. But with just a tinch of tweaking as happens with the so-called reality shows that are already so popular, Congress could have a hit on its hands. In fact, Reps. Darrell Issa (R-Calif.) and Elijah Cummings (D-Md.) filmed the potential program's pilot today during yet another hearing on Internal Revenue Service operations. Check it... Read more →

Maybe the National Taxpayer Advocate's recommendations came too late in the budgeting process. Or maybe members of Congress just like whacking the most hated federal agency with a fiscal bludgeon. Whatever the reason, the Internal Revenue Service is going to have to make do with less money in fiscal year 2014 under the omnibus budget bill worked out this week on Capitol Hill. UPDATE: The House passed the spending bill Wednesday, Jan. 15, afternoon by a bipartisan 359-to-67 margin. It now awaits Senate action. And that means all of us taxpayers will probably suffer at least a little bit this... Read more →

You remember the Internal Revenue Service's inappropriate targeting of groups seeking tax-exempt status based on the organizations' political leanings, right? When the word about the clumsy application review process was leaked to the media by now retired IRS executive Lois Lerner in advance of a damaging Treasury Inspector General for Tax Administration (TIGTA) report, Congress jumped right into the middle of the mess. Republican-led House committees held what seemed like daily hearings on IRS tax-exempt review techniques, particularly as they applied to Tea Party and other conservative groups. Democrats countered with evidence that liberal and progressive groups also got added... Read more →

A lot of attention has been paid, rightfully, to the federal workers who are on furlough or working for free until Capitol Hill agrees on a fiscal 2014 budget. Among those sitting out the political stalemate are around 86,000 Internal Revenue Service rank and file workers. But as the shutdown approached, there also were some changes -- or not -- at the IRS' executive level. Werfel remains, for a while: First, the top guy's status. Daniel Werfel stepped in as Acting IRS Commissioner (his title was tweaked for administrative reasons in June) after word broke, and Congressional hearings began, on... Read more →

Just like filmdom's persistent poltergeists, Congressional attacks on the Internal Revenue Service are back. House Republicans are hoping that new looks into IRS improprieties in dealing with applications for tax-exempt status will recapture public attention. IRS email appetizers: The stage was reset by an unbylined outlook piece in the Wall Street Journal this week entitled "Lois Lerner's Own Words." House Ways and Means Chairman Rep. Dave Camp (R-Mich.) posted the column in full on the committee's website and sent out an "in case you missed it" notification of the article via email. The newspaper looks at emails between Lerner, now... Read more →

Since May, we -- OK, primarily tax geeks and members of Congress -- have focused on the issue of tax-exempt status. This is because on May 10 we learned that the Internal Revenue Service had a questionable system of assessing whether a group that might engage in some political activity should be allowed to operate as a nonprofit. The main issue is whether the IRS improperly relied on its perception of the organizations' political leanings. Tea Party groups said they did and cried foul. It later was revealed that more liberal groups also got extra IRS scrutiny. That battle is... Read more →

The controversy over how and which groups the Internal Revenue Service targeted in assessing applications for nonprofit status is heading to court. Maryland Democratic Rep. Chis Van Hollen, the ranking member of the House Budget Committee, will be the lead plaintiff in a lawsuit expected to be filed today in federal district court challenging the IRS' interpretation of the law that governs the tax status of social welfare organizations. UPDATE, 2 p.m. Aug. 21: It's official. The lawsuit has been filed with the U.S. District Court for the District of Columbia. You can read the press release issued by the... Read more →

The richest 20 percent of Americans enjoy more than half of the benefits from 10 major tax breaks. That's the analysis of the nonpartisan Congressional Budget Office in its report, "The Distribution of Major Tax Expenditures in the Individual Income Tax System," released last week. The tax breaks -- or expenditures as they are known in legislative circles -- include tax deductions, tax credits, preferential tax rates for certain types of income and income that is excluded from taxes. The CBO grouped the expenditures into four categories: Exclusions from taxable income, which includes employer-sponsored health insurance, net pension contributions and... Read more →

A whistleblower who exposed a tax fraud scheme by Enron and Wall Street firms has been awarded a $1.1 million reward by the Internal Revenue Service. The payout came from the new IRS Whistleblower Office, but was made under prior, less generous guidelines. Those older rules, which still apply in some instances, call for a reward of up to 15 percent of the money that the IRS recovers based on the information. The whistleblower office was revamped in 2006. Now when whistleblower information about alleged tax cheating leads to IRS collection of unpaid taxes and the subsequent recovery amount exceeds... Read more →

The National Hot Rod Association's tax-exempt status could soon be under IRS scrutiny. An anonymous complaint was filed with the agency's Exempt Organizations Division contending that the drag racing group's activities are identical to those organized by for-profit automobile entertainment companies. "Public information reveals that the NHRA operates like a commercial business by providing specific services to its members --whether in the form of prize money to winners or payments to race track operators or other private groups benefiting from the racing events," said Marcus S. Owens, a senior member in the Washington, D.C., law firm Caplin & Drysdale. Photo... Read more →

Got your guacamole ready for tonight's BCS title game? It is, after all, the Tostitos championship bowl from Glendale, Ariz. (FYI, I'm not getting any remuneration, in cash or product, from the avocado industry or Frito-Lay, dang it!) Befitting a big game, there's lots of drama to go around. The excitement of the Oregon Ducks making to to the title match. The questions about Auburn quarterback Cam Newton's eligibility. And, of course, there's the annual blasting of the the Bowl Championship Series itself. Some folks, however, have moved beyond grumbling. Playoff PAC, a federal political committee, is, according to its... Read more →

A tax expert's take on illegal political activity by tax-exempt organizations

I love it when the tax stars align. Yesterday I noted that some political watchdog groups and the head of the Senate's tax-writing committee have asked the IRS to look into whether tax-exempt groups are illegally engaging in political activities. Then today, TaxProf points me to Election Law @ Mortiz, where Donald Tobin, senior fellow for election law at Moritz College of Law at Ohio State University, examines whether these tax-exempt groups are as clever as they seem. These Section 501(c)(4) organizations are, according to the section of the Internal Revenue Code that gives them their name, "social welfare organizations."... Read more →

Karl Rove group, other tax-exempt orgs under fire for alleged political activities

You've got to love the theater that is U.S. politics even if you don't like the actual results. As the Nov. 2 midterm election day nears, mud (and other organic material) definitely is being slung. And some folk are worried that not only are aspersions being cast, but that they're being done so improperly. So they asking the IRS to look into suspected improper political activities. Democracy 21 and the Campaign Legal Center contend that Crossroads GPS, a conservative group back by Karl Rove, is violating tax laws meant to limit political activity by nonprofit groups. In a letter to... Read more →

Earlier today, nearly 100 pastors spoke to their congregations about political issues. The special sermons were part of this year's Pulpit Freedom Sunday. Like the first Pulpit Freedom Sunday in 2008, also a general election year, the ministers are defying tax laws that say tax-exempt organizations cannot support politicians and keep their tax-advantaged status. The ministers, egged on encouraged by the Scottsdale, Ariz.-based nonprofit Alliance Defense Fund, say they are just exercising their right to free speech. Yes, reverends, you, like every other American, can say pretty much what you want. But if your group is getting a tax break,... Read more →

Oklahoma pastor, political group under scrutiny for alleged tax status violations

As the Nov. 2 midterm election date nears, political watchdogs are getting picky. That's not to say they shouldn't, regardless of how near or far an election day is. Everyone should play by the rules when it comes to campaigns. And IRS rules under tax code section 501(c)(3), which provides nonprofit status to churches, religious groups and other organizations, say that such entities "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." However, efforts that are strictly designed to educate voters... Read more →

Pulpit Freedom Sunday not likely to get an 'amen' from IRS ... or congregants

For members of some churches this Sunday, their church is no sanctuary from politics. A group of ministers, around 35 at last count, will tell their congregations to vote for either Barack Obama or John McCain. This so-called Pulpit Freedom Sunday message is a direct challenge to the tax law that prohibits tax-exempt organizations from participating in overtly political activities. It also might not be as welcome as the clergy might think, according to a recent poll on combining religion and politics. More on this survey in a bit. Free speech or tax free? The tax law at issue was... Read more →

Home-to-church conversion cuts tax bill

By converting his $3 million home to a church, an Illinois man has saved himself around $80,000 in property taxes. But officials of the Village of Lake Bluff say not so fast. While they try to sort out whether the new Armenian Church of Lake Bluff is indeed legitimate, they have notified home/church owner George Michael that he owes the municipality $115,000 in fines for zoning violations in connection with the property conversion. According to the Chicago Tribune, Michael told state officials that he started the new church more than a year ago after he got an online pastor's degree.... Read more →

Sept. 28: Politically Religious Day

Or maybe it's Religiously Political Day. Whatever you want to call it, you might want to go ahead and mark that last Sunday in September on your calendar. It could be an interesting one, from spiritual, political and tax standpoints. On that day, the Alliance Defense Fund (ADF), a conservative legal group, plans to have 50 pastors endorse candidates from their pulpits. The goal, according to the New York Times' political blog The Caucus, is to provoke a legal challenge to the tax law that prohibits religious organizations from endorsing or opposing candidates for public office. The ADF, in its... Read more →