Conservatives are howling about the IRS targeting Tea Party groups applying for nonprofit tax exemptions.
Well, welcome to our world. Nonprofit journalism has been going through the same thing for the last few years, with almost none of the screeching—even though journalism organizations had a much better case for tax exemptions than did the Tea Party groups.
Tell me if this sounds familiar: The IRS targets a particular kind of nonprofit applicant for special scrutiny. Scrutiny comes from the Cincinnati office, works upward to Washington, D.C., and leaves applicants in limbo for years. After years of rubber-stamping approvals, the review comes amid a surge in applications in a murky part of the tax code. Some suggest politics plays a role in favoring some applications. The IRS itself specifically questions applicants about their political activities.
That’s what happened to the nonprofit-news movement for the better part of three years, something I reported on last fall. But there’s been little-to-no uproar over the First Amendment implications of selecting journalism startups for special scrutiny.
San Francisco Public Press, El Paso’s Newspaper Tree, New Orleans’s The Lens, Rhode Island’s Johnston Insider, the Investigative News Network, San Diego News Room, Virginia’s The Arlington Mercury, and the Chicago News Cooperative all had to run the IRS gamut—and those are just the ones we know about. (The right-wing provocateur James O’Keefe III’s Project Veritas, by contrast, breezed through 501(c)(3) approval while legitimate news organizations who had applied earlier waited years, answering repeated (and repetitive) inquiries from IRS agents.)
The INN’s Kevin Davis told me last November that “The IRS has preemptively suggested that we modify our procedures, change our policies, and modify our articles of incorporation to remove the word ‘journalism’ because that is not a charitable cause.” Agents asked the SF Public Press, repeatedly, to sign forms promising not to make political endorsements, according to Steven Waldman’s Council on Foundations report two months ago.
Why did the IRS suddenly start putting nonprofit journalism startups through the wringer, and why did it take so long to finally approve them? The Cincinnati IRS office noticed a surge in activity in the sector a few years ago as for-profit journalism took a beating, and while the IRS had typically put up little resistance to nonprofit news applicants (at least since it threatened Mother Jones’s tax-exempt status in 1981 and was defeated), Congress has never specifically protected journalism in the 501(c)(3) section of the law.
Journalism organizations, including this one, get in under the educational activity exemption, which requires “the instruction of the public on subjects useful to individuals and beneficial to the community.” While the IRS’s fumbled the handling of nonprofit news in the last few years, the need for an updated code specifically exempting journalism is clear.
Why the nonprofit news mess took so long to sort out is less clear, though it’s worth noting, as David Cay Johnston has, that the IRS is seriously understaffed. The Transactional Records Access Clearinghouse at Syracuse University says IRS staffing is down 23 percent in the last two decades, while tax returns are up 27 percent. Do the math.
The Tea Party story is awfully similar. There’s a surge in applications from these groups, except they’re applying under the 501(c)(4) section, which allows groups “operated exclusively to promote social welfare” to operate without taxes. The code specifically prohibits political organizations, but with a loophole big enough to drive an American Crossroads and a Priorities USA through:
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. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f).
It’s unsurprising that the sudden increase in Tea Party-related 501(c)(4) applicants would raise red flags at the IRS since these groups, by their nature, likely had political objectives. None of their applications ultimately were denied (read an IRS expert, David Cay Johnston, for more on this).
"For another, the IRS director during the targeting was a George W. Bush appointee."
Good grief, still peddling that libtard talking point?
Douglas Schulman is a partisan Democrat, has given to Democrat organizations such as the DNC.
That's like saying Chuck Hagel is a Democrat because he's a Obama appoiintee.
#1 Posted by David, CJR on Thu 16 May 2013 at 08:29 AM
The nonprofit news experience undermines the Tea Party targeting outrage
To put it another way, we will reserve our hysterics when its our ox getting gored. America loves a hypocrite.
#2 Posted by Mike H, CJR on Thu 16 May 2013 at 09:45 AM
The nonprofit news experience undermines the Tea Party targeting outrage
VS
IRS Rationale for Tea Party Scandal Is Debunked by Data
Applications for tax exemption from advocacy nonprofits had not yet spiked when the Internal Revenue Service began using what it admits was inappropriate scrutiny of conservative groups in 2010.In fact, applications were declining, data show.
http://philanthropy.com/article/IRS-Rationale-for-Tea-Party/139277/
#3 Posted by Mike H, CJR on Thu 16 May 2013 at 12:34 PM
"To put it another way, we will reserve our hysterics when its our ox getting gored. America loves a hypocrite."
I know. The right was silent on this issue in 2007.
http://www.nytimes.com/2007/03/09/opinion/09krugman.html
"The bigger scandal, however, almost surely involves prosecutors still in office. The Gonzales Eight were fired because they wouldn’t go along with the Bush administration’s politicization of justice. But statistical evidence suggests that many other prosecutors decided to protect their jobs or further their careers by doing what the administration wanted them to do: harass Democrats while turning a blind eye to Republican malfeasance.
Donald Shields and John Cragan, two professors of communication, have compiled a database of investigations and/or indictments of candidates and elected officials by U.S. attorneys since the Bush administration came to power. Of the 375 cases they identified, 10 involved independents, 67 involved Republicans, and 298 involved Democrats. The main source of this partisan tilt was a huge disparity in investigations of local politicians, in which Democrats were seven times as likely as Republicans to face Justice Department scrutiny.
How can this have been happening without a national uproar? The authors explain: “We believe that this tremendous disparity is politically motivated and it occurs because the local (non-statewide and non-Congressional) investigations occur under the radar of a diligent national press. Each instance is treated by a local beat reporter as an isolated case that is only of local interest.”"
They sure didn't cry out about this back in 2008:
http://harpers.org/blog/2012/09/boss-roves-justice/
"The Republican campaign was bolstered by a steady leak of damaging materials from Siegelman’s investigation to two Alabama newspapers tightly linked to the state’s G.O.P. Of course, the substantial donations that Scrushy had made to Republican governors who appointed him to the same board were ignored, as was the appointment by Siegelman’s Republican successor of one of his key donors to the same board. The message that this prosecution sent was unequivocal: donations to the G.O.P. were fine, but write a fat check to the Democrats and you risked a criminal investigation. Moreover, this campaign was not limited to Alabama. Next door in Mississippi, one after the other, leading donors to the state’s Democratic Party found themselves the targets of federal criminal probes. The result was direct and swift: Democratic funds dried up as Republican coffers began to bulge. The Justice Department had been converted into a campaign fundraising tool."
Could have used your "liberty or blood" help then.
So when did you start getting hysterical?
Rick Santelli did his tea party rant in 2009. Glen Beck did his 9/12 project in 2009. The whole world changed for the right in 2009 (wish I could tell why).
So yeah, when you link "IRS Rationale for Tea Party Scandal Is Debunked by Data" do you not think the IRS might have been suspecting a surge a coming later in 2010?
After all the "scrutiny began... in March 2010" when one movement was getting saturated fox news coverage and Koch sponsorship... since 2009.
And boy, if you find filling out forms a bother, you must be real upset over the Democrats who were sent to jail for political reasons.
Or not, because "America loves a hypocrite."
#4 Posted by Thimbles, CJR on Thu 16 May 2013 at 02:23 PM
The IRS has wrought havoc on start-up, online community non-profit papers, as your article notes. No one knows how many are sitting silently out in the boonies, waiting for their 501(c)3 certifications and meanwhile trying to placate the IRS by not publishing. But many others have published while awaiting certification, IRS be damned. Not so Newspaper Tree, in El Paso. They hired a staff last year, mistakenly thinking they would soon have their certification, and planned to begin publishing in June 2012. When June came and went and there was still no 501(c)3 approval, instead of publishing, Newspaper Tree waited another several months, sitting on a pile of wilting political investigative stories, during one of El Paso's most exciting political seasons in years. I know. I was the investigative reporter who investigated and reported--but never got published. Newspaper Tree now has no staff except for a publisher. It never asked the community to organize to pressure the IRS, but instead spent a lot of time trying to figure out how to convince the IRS it was going to do "education" rather than "journalism." The certification finally came last month. Now the paper must start from scratch, after wasting precious staff, monetary resources and community trust. One wonders how many other papers the IRS has crippled this way. One also has to be proud of those that have stood their ground and published despite IRS intransigence.
#5 Posted by Debbie Nathan, CJR on Thu 16 May 2013 at 07:32 PM
"...these groups, by their nature, likely had political objectives. None of their applications ultimately were denied....
I realize that Chittum is spinning as hard as he can (heck, poor Thimbles can't do anything but try to change the subject), but running two contradictory sentences one right after the other is just a bit sloppy.
"It’s unsurprising that the sudden increase in Tea Party-related 501(c)(4) applicants would raise red flags at the IRS...."
Does Chittum think we're not familiar with the facts? There's no reason why a surge in applications should produce a complete shutdown in approvals. And putting "Progressive" in a group's title is just as much a political red flag, but those groups were approved without delay.
#6 Posted by Tom T., CJR on Fri 17 May 2013 at 01:33 AM
"(poor Thimbles can't do anything but try to change the subject)"
Yeah, you know what? This is the crappy thing about North American politics. Less than six months ago 20 children were murdered. Less than a month ago, a bill was put forward to slow the madness
http://www.politifact.com/truth-o-meter/article/2013/apr/30/summary-manchin-toomey-gun-proposal/
and the republicans put it down through filibuster, because the rights of criminals to possess arms trumps their right to vote and the public's right to safety.
The NRA had their freakout. People started walking around with their guns in public, regardless of how unsafe they made their neighbors feel in the wake of recently murdered children. Certain senators started complaining to the cocktail leeches who run that DC political rag that the parents of slain children weren't being subtle enough.
http://www.esquire.com/blogs/politics/Politico_Scoops_World
We have an unemployment problem, a bankster problem, a climate problem, a lax regulation of explosive fertilizer problem, and none of that can be dealt with because we have a republican problem. They suck the oxygen out of politics whenever they enter the room extinguishing any chance life will get better through better managed government. They hate democrats, they really hate the blah..democrat, and they refuse to participate in the act of governance that they were elected to do.
Instead, they attempt to repeal Obamacare for the 37th? 38th? time. They're a goon squad who didn't pause for an instant while the blood of 20 murdered kids flowed through town, why should they pause for the sake of healthcare coverage extended to the ill and uninsurable through conservative policy? Why should they pause while the Arctic melts and the midwest suffers drought?
They don't care. They don't care that republican politicians cheat on their wives and lie to their constituents about their affairs. They don't care when republican presidents blow up the deficit and use the tools of government to harass their opponents overtly. They don't care when republicans act to gerrymander and disenfranchise legitimate voters from participating in the democratic process. They don't care that republican negligence allowed the greatest terrorist attack on American soil to occur unimpeded and that republican mendacity lead the nation to spend billions on a war in the wrong country.
They don't care. Nobody does. 6 months later, it's forgotten and Roger Ailes & Drude warm up the puke funnel once more.
We're not going to talk about the 20 murdered children who's cold corpses we're walking away from without doing a damn thing to make their loss meaningful in any real way. Because of Republicans.
Noo, we've moved onto much more weighty trivial bullsh*t. IRS paper pushing problems of no real consequence. AP phone records being handed over which every pundit was demanding congress pass telecom immunity for back in 2008. BENGHAZI.
We are never going to find political solutions to our problems while one side gets to shake every bloody scandal of its back like a duck and then quack about the bloody mess surrounding it. We are never going to solve our problems while we have a media that is distracted from real republican bloody messes by democratic paper cuts.
Who's going to be accountable for leaving those twenty bodies behind without stopping the holes that allow sickos to add twenty more bodies to the pile? Who's going to be held responsible for breaking the functions of a government that was elected by the people twice?
No one, because we're going to change the subject.
#7 Posted by Thimbles, CJR on Fri 17 May 2013 at 03:49 AM
Tom T.,
here's the list of groups flagged and later approved under the controversial search terms. You'll find 8 applicants with "Progressive" or "Progress" in their names, and this list doesn't include the hundreds of applicants reviewed without the controversial Tea Party filters. EDIT-- forgot the link:
#8 Posted by Ryan Chittum, CJR on Fri 17 May 2013 at 11:12 AM
Not sure what you're saying, Ryan, but it's clear by now that (a) the IRS scrutiny of right-wing groups began at a time when there was no surge in 501(c)(4) applications, and (b) whatever its workload, the IRS shut down approvals of right-wing groups while still readily approving groups from the left.
a) http://philanthropy.com/article/IRS-Rationale-for-Tea-Party/139277/
b) http://www.usatoday.com/story/news/nation/2013/05/14/irs-gave-progressives-a-pass-tea-party-groups-put-on-hold/2159983/
#9 Posted by Tom T., CJR on Sat 18 May 2013 at 12:29 AM
Tom T: "the only known 501(c)(4) applicant to have its status denied happens to be a progressive group: the Maine chapter of Emerge America, which trains Democratic women to run for office." http://www.salon.com/2013/05/15/meet_the_group_the_irs_actually_revoked_democrats/
#10 Posted by Ryan Chittum, CJR on Sat 18 May 2013 at 02:12 PM
One thing that's sorta getting missed in all this weeping over being profiled (funny, don't remember conservatives being apologetic when they were introducing 'Show us your papers!' laws that targeted Latinos, but that's not going to stop republicans like Kevin Brady from sputtering stuff like, "Is this still America?" between hyperventilations) is why were they really being profiled?
http://m.mcclatchydc.com/dc/db_97942/contentdetail.htm?contentguid=rZC2BJL6
"Cases should be organized by “a review of the facts . . . and not just by name,” Joseph Grant, acting commissioner, tax exempt and government entities, wrote in an April 30 response to the inspector general.
“We recognize that some errors occurred in the handling of the influx of advocacy cases,” he said.
Grant defended choosing certain organizations for review, saying that to qualify for special status a group had to be primarily involved in the promotion of social welfare and not political involvement.
“Many applications included what appeared to be incomplete or inconsistent information,” he said. “For example, a number of applications indicated that the organization did not intend to conduct campaign activity but elsewhere described activities that appeared in fact to be such activity.”"
So what is this "social welfare" requirement about?
http://m.mcclatchydc.com/dc/db_97942/contentdetail.htm?contentguid=T9dAQX7s
"The section of the tax code sought by the tea party groups was established for the benefit of groups that promote social welfare, generally nonprofit operations. Examples on the IRS website involve community service and groups that provide a certain local benefit.
Somewhere along the line, this longstanding classification has become a loophole exploited by groups seeking to elect Democrats, Republicans and most recently tea party candidates and like-minded groups.
Search the membership of state associations of nonprofit organizations and you’ll have to work to find any that are political in nature. The California Association of Nonprofits in San Francisco lists online more than 1,400 members, yet none have patriot, tea party, progressive or similarly political names.
Yet compare that against the applications in recent years to the IRS for this special tax-exempt status, and a good percentage of the applications appear to be organizations that are decidedly political in nature."
So that's interesting. This classification was designed for organizations with political activities on the side like the posthumous Acorn, not for Glen Beck reading clubs who's primary community activities would be brandishing misspelt placards, organizing picnics, and yelling on Internet forums about 'Tyranny' and birth certificates.
And do you know why that's interesting?....
#11 Posted by Thimbles, CJR on Sat 18 May 2013 at 04:11 PM
'know why that's interesting?'
Because guess what was coming out of the conservative puke funnel just a year ago:
http://www.foxnews.com/politics/2012/07/19/taxpayer-watchdog-calls-on-irs-to-probe-re-branded-texas-acorn-branch/
"Cause of Action, a nonprofit taxpayer watchdog, charged in a letter to the Treasury Inspector General for Tax Administration that the tax-exempt Texas Organizing Project (TOP), formed from the ashes of scandal-ridden ACORN, is using money funneled to it by a closely associated group called the Texas Organizing Project Education Fund for political activity...
“Fiscal sponsorship [has allowed TOP and TOP ED] to use a loophole in the tax code to engage in improper political activities under the radar of the IRS,” Dan Epstein, executive director of Cause of Action, said to FoxNews.com. “Cause of Action is asking the IRS to investigate these groups for potential abuses of their tax-exempt status, and to hold them accountable for any violations they find.”
This marks the third such investigation that the watchdog group has called for accusing other re-branded ACORN branches of being engaged in similar activities."
I think before we continue listening to conservatives weep and cry over the state of their nation when it comes to their paperwork requirements, maybe we should look at their positions on other people's paperwork.
Hypocrites.
#12 Posted by Thimbles, CJR on Sat 18 May 2013 at 04:26 PM
Meanwhile:
http://mobile.bloomberg.com/news/2013-05-15/irs-sent-same-letter-to-democrats-that-fed-tea-party-row.html
"The Internal Revenue Service, under pressure after admitting it targeted anti-tax Tea Party groups for scrutiny in recent years, also had its eye on at least three Democratic-leaning organizations seeking nonprofit status."
And Dylan Matthews put a FAQ together:
http://m.washingtonpost.com/blogs/wonkblog/wp/2013/05/14/everything-you-need-to-know-about-the-irs-scandal-in-one-faq/
"The group had even more difficulty providing transcripts and details of speakers at its events, since they hosted informal gatherings such as "rant contests" where anyone could come and express their views.
While the IRS awarded the Waco Tea Party tax-exempt status about six weeks ago, Walker said the group was now considering suing the agency since the process not only consumed time and effort but prompted the group to scale back its 2012 get-out-the-vote operation. "We were afraid to do it and get in trouble," she said."
I don't know, does anyone think 'rant contests' count as social welfare?
These goofs are impossible to satire.
#13 Posted by Thimbles, CJR on Sat 18 May 2013 at 05:18 PM
"Non-Profit Journalism?"
You mean Soros Funded and Government Sponsored
'outreach reporting' designed to organize thoughts and communities, and register them to vote three months early.
Guess it's ok, as all these lemmings in these University of higher cultural awareness have to find work in a politically correct enterprise.
#14 Posted by Massage the Medium, CJR on Sun 19 May 2013 at 10:23 AM
The IRS took more than two and half years to approve the application of the San Francisco Public Press. What's interesting is that just a small part of what we were asked to provide was about political endorsements (which we affirmed that we have never done or plan to do anyway, because we do local investigative reporting, not advocacy journalism).
Most of the agency's inquiries were about due diligence on our organizational structure (making sure or founding papers were in order), our educational mission (how many interns we mentor each year and public programs) and our business model (why we charge for our print edition and don't accept advertising). The back-and-forth was exhaustive, and exhausting. Ultimately we were approved last summer.
But the overall impression I got was that the agency slowed down the applications for all nonprofit news organizations because it saw a whole clump of similar ones at the same time and didn't understand why at first. The office was clearly understaffed, and had a less-than-consistent approach to determining our worthiness for nonprofit status because the code was so complicated, convoluted and hard to interpret.
We did not end the process believing that the IRS was "out to get us," but that it was an agency trying — not always successfully — to triage a flood of applications in a growth area to make sure that bad precedents didn't get set. While the delay was frustrating (as it remains for other nonprofit news organizations), we understand that was an orderly extension of an established process.
Tax-exempt nonprofit status is a privilege, not a right. Organizations should have to provide a clear articulation of and evidence for their charitable purpose. This process can and should be improved, and vague areas of law should be clarified to make sure cases are handled consistently and efficiently.
Michael Stoll
Executive Director
San Francisco Public Press
http://sfpublicpress.org
#15 Posted by Michael Stoll, CJR on Mon 20 May 2013 at 08:27 PM