Posted on 12/23/2013 3:24:40 AM PST by markomalley
The principle involved in the recent IRS scandal appears to be that every group with an interest in twisting the electoral process to its own advantage is exempted; only those groups that stand for disinterested good government are muzzled.
The IRS recently proposed rules to “provide guidance” to tax-exempt “social welfare” organizations concerning restrictions on their political activities. As Kimberly Strassel noted in the Wall Street Journal, this notice represents the IRS’s response to the revelations about its use of the tax laws to hamstring tea-party groups before the 2012 election.
The new rules are designed to eliminate the citizen groups before the 2014 election. They would have the effect of squelching tea-party communications with the public “referring to” a candidate or party, with especially tough restrictions during the run-up to an election. The blacklist applies to “direct or indirect candidate-related political activity.” Covered activities include direct funding, volunteer work, sponsorship of debates, preparation of voter guides, website maintenance, e-mail or social-media campaigns, and registration drives. If an unspecified, but too-large, portion of a group’s activities falls within the definitions, its tax-exempt status is jeopardized.
The proposal does not apply to political activities conducted by unions, business organizations, agricultural associations, or similar entities. Nor does it apply to charities, which are supposed to be more stringently regulated than social-welfare organizations, but which frequently push the envelope. And as salt in the wound, the K Street lobbyists’ social-welfare groups, which serve as go-betweens and bagmen for lobbyists and government officials but do not communicate with the public, would also be untouched. Washington organizations with broad membership out in the nation at large would, however, be stifled along with the tea-party groups.
The IRS rules might not survive legal scrutiny, but this is irrelevant. Once final, the rules would be applied retroactively, so the IRS can leave them in the “proposed” stage until after November 2014, which makes them unreviewable by a court even as they paralyze the citizen groups. The IRS could also start applying the new standards immediately by requiring that organizations requesting tax-exempt status promise to abide by them.
To understand how this perverse state of affairs came about, and to develop a strategy of resistance, one must start with the core principle that the Internal Revenue Code is supposed to be about government revenue. Therefore, it focuses on moneymaking commercial activities. However, tax law must also deal with the reality that millions of entities in U.S. civil society are not commercial, and indeed it has done so since 1913, in Title 26, Subtitle A, Chapter 1, Subchapter F, “Exempt Organizations.”
The core of Subchapter F is section 501, which has dozens of subparts listing various types of non-commercial groups. The list is eye-glazing, but it’s necessary to an understanding of the context of the current dispute, because it shows the breadth of Congress’s view of exempt activities:
Government corporations; Foundation[s] organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition; Civic leagues or organizations; Local associations of employees; Labor, agricultural, or horticultural organizations; Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues; Fraternal beneficiary societies; Cemetery companies;
and so on through 29 subsections, plus numerous definitions and qualifications.
These entities are declared tax exempt in the sense that any excess of revenues over expenses, which is usually minimal or nonexistent, is not subjected to the income tax; and they file a special form designed for nonprofits instead of the standard corporate tax returns.
For the most part, individual taxpayers cannot deduct contributions to these groups from personal income taxes. That privilege is reserved for donations to the subset of organizations that qualify as charities or foundations under section 501(c)(3). These are more stringently regulated than other entities to prevent their being used as tax dodges, and 501(c)(3) contains explicit prohibitions on political activities by organizations claiming the benefits of the subsection.
This distinction between the 501(c)(3) charities and other exempt organizations is very important, but often ignored. None of the subsections describing other types of exempt groups contain anything like the prohibition on political activity that is found in 501(c)(3), except for a provision governing co-op health insurers that was added by Obamacare.
There can be no freedom if the IRS continues to engage in unconstitutional, fascist political activity, at the direction of the Obama fascist government.
Actually, the USA at this point has no freedom, it only has an illusion of freedom.
This is why so many US citizens now live outside of the USA as ex patriots in other nations that still have freedom.
“Once final, the rules would be applied retroactively,”
It would be illegal to do that in the USA that I grew up in.
1776!
Income tax revenues experience wild swings as the economy cycles up and down. But sales taxes are more robust because at some level consumers need to pay for the basics and essentials of living which make up the bulk of purchasing.
In an economic downturn, consumers will forego the new home, the new car, the planned vacation or the new flashy set of outdoor Christmas lights. But these things don’t add up to much as a percentage of gross purchases compared to the amounts spent for essentials. So states with sales taxes but without income taxes see smaller swings in revenue.
The Federal government could pass the FairTax legislation which has a built-in tax cut in the manner of a tax rebate which effectively voids federal taxation for all Americans up to the level of purchases for the necessities of living, the essentials.
The FairTax legislation gets rid of the federal income tax and the IRS while putting tax collection into the hands of the states and making enforcement much easier. The legislation does not tax exports so that American products sold overseas become immediately more competitive in price thereby bringing jobs back to American soil. The FairTax boosts GDP by 10% in its first year.
The IRS needs to be terminated. Even if we have a so called “fair tax.”
It is now under the sole direction of Obama, and Congress has no teeth to provide the proper overview and supervision.
The IRS is nothng but a political wing of the Obama junta now running the USA. And they are very much armed and dangerous.
http://thenewbostonteaparty.com/2013/06/02/irs-armed-and-dangerous.aspx
Mark Levin:
The IRS has outlived any semblance of usefulness to the People of the USA, and its work in discriminating against conservative organizations cklearly violates the COnstitution. The IRS needs to be destroyed, dismantled and put into the dust bin of history.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.