Now that the TIGTA report is out, I wanted to follow up on my previous rant (yes, still ranting) about the IRS-Tea Party nonsense. First, just to be clear – I think the IRS mucked it up. They should not have chosen the terms that they chose to centralize the applications. Was it a conspiracy against conservatives? No. Was it poor management, combined with too many applications, too little staffing, and an area of law that is hazy and confusing at best? Absolutely. Should they be scouring the application of every organization (regardless of political affiliation) conducting political activities? Most definitely.
Read more for both a few of my thoughts on the TIGTA report, as well as links to a few others’ writings on this issue that I think are accurate –
Perhaps it is just my overall frustration with media’s over dramatization of so much of the news. Perhaps it is my admitted lack of sympathy for a political philosophy with which I have great difficulty finding common ground. For those and probably a host of other reasons – I need to vent about how silly (how I would politely describe it) I think this news story is. If you don't want to read my rant -- you could read my prior post from this time last year, which explains my position in a less ranty fashion.
As an attorney who works primarily with start-up and small nonprofit organizations, I am very familiar with the reality that someone on the inside is often funding some (or all) of the activities of the organization in the early days. Particularly with start-ups, I frequently get questions about deductibility of contributions prior to receiving tax-exempt status from the IRS. A recent court decision should serve as a reminder to these individuals as to the importance of ensuring that the donor substantiation rules are followed.
Finally, we all get to learn something from colleges and universities without increasing our debt load! Last week the IRS released the final report from the Colleges and Universities Compliance Project that was launched in 2008 by sending 400 compliance questionnaires to both public and private colleges and universities. Now that the results are in, it is time to look at what small and medium size organizations of all kinds (not just colleges and universities) can learn from the misfortune of their larger, more well-funded brothers and sisters!*
The IRS recently sent out at least 1,300 compliance questionnaires to “self-declared” Section 501(c)(4), 501(c)(5), and 501(c)(6) organizations. These are organizations that have never filed a Form 1024 to obtain recognition for tax-exempt status (the law does not require them to), but claim that they operate in accordance with the relevant requirements for their claimed tax-exempt status. The questionnaire is not an audit or examination of the organization – its purpose is simply to gather information about organizations that claim exemption (again, without filing for formal recognition) under these tax code sections. The IRS will then collect that information and use the results to guide future compliance projects, examinations, etc.