Fear not. I already have put in a call to Captain Renaud, Prefect of Police.
The return, signed under penalty of perjury specified that the grants would be used for social welfare purposes, “and not for political expenditures, consistent with the organization’s tax-exempt mission.” But that’s not what happened. New tax documents, made public last Tuesday, indicate that at least $11.2 million of the grant money given to the group Americans for Tax Reform was spent on political activities expressly advocating for or against candidates. This means Crossroads spent at least $85.7 million on political activities in 2012, not the $74.5 million reported to the Internal Revenue Service. That’s about 45 percent of its total expenditures.
It is here where we remind our readers about the Citizens United decision, and about one of the more famous dicta pronounced by Justice Anthony Kennedy who, from all the available evidence, apparently vacations on Mars: “We now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”
Of course not.
Then the revolution stalled. The Open Source Digital Voting Foundation spent the next four years in a kind of government-induced limbo as the Internal Revenue Service delayed processing of its application for nonprofit status. That delay cost the operation an untold amount of grant and donation dollars, and though the project has produced some software, it still hasn’t begun work on important things like ballot-counting and tabulation devices and accessible voting machines.
We’re happy about our deserved designation, and yet we are so freaking angry at the IRS for what they made us go through and the damage they’ve caused us.’— Gregory Miller
The delay is part of a much larger issue swirling around the IRS. This spring, an Inspector General report revealed that the agency was closely scrutinizing tax-exempt applications from conservative groups, many affiliated with the Tea Party, and the admission drew complaints nationwide. But the Tea Party is hardly the only organization affected. Progressive groups, health care data exchanges, and medical marijuana growers were cited by the IRS — and so were many open source software projects, including the Open Source Digital Voting Foundation.
The good news is the Foundation has emerged from IRS limbo. Two weeks ago, the IRS finally approved its application, ending a six-and-a-half-year review, during which the project filed hundreds of pages of documents and responses to agency interrogatories. “We’re happy about our deserved designation,” Miller says, “and yet we are so freaking angry at the IRS for what they made us go through and the damage they’ve caused us.”
The FBI has arrested a Utah man who is accused in court documents of making machine guns and discussing the bombing of an Internal Revenue Service building and other government facilities.
Keith Max Pierce, 34, of Provo, Utah, currently is only charged with three federal firearms charges - failure to register as a firearms dealer, illegal possession of machine guns and possession of a firearm with an obliterated serial number.
Officials have not said what Pierce’s motivations may have been.
Pierce was arrested Wednesday in Provo, Utah, by federal agents assigned to a Joint Terrorism Task Force. He is scheduled to appear at a bail hearing Monday in U.S. District Court in Salt Lake City.
Debbie Dujanovic Bertram, a spokeswoman for the task force, told Hatewatch today she could not discuss if Pierce is a “sovereign citizen,” someone who believes himself exempt from most laws and taxes, or a member of any antigovernment groups.
“This [is] an individual who made comments indicating he could be a threat to the community,” Loren Cannon, assistant special agent in charge of the FBI office in Salt Lake City, said Thursday, the Provo Daily Herald reported.
The investigation of Pierce began last November after he allegedly made comments to an FBI informant, according to court documents unsealed Thursday. Pierce’s statements concerned “bombing the Internal Revenue Service (IRS) based in Provo, Utah, the Provo Police Department and a court building (believed to be the Provo City Justice Court),” the court document says.
Pierce also discussed having access to fully automatic weapons and having the tools and knowledge to make fully automatic weapons.
During the ensuing investigation, an undercover FBI agent was introduced to Pierce through an online gun advertisement, authorities disclose in federal charging document. On March 20, the document says the undercover agent and Pierce “made a deal” for the purchase of a fully automatic AR-15, the same type of weapon used by U.S. military forces. Without a federal registration, it is illegal to possess fully automatic weapons.
But as U.S. president for the last 4-1/2 years, Barack Obama has faced accusation after accusation of impinging on civil liberties, disappointing his liberal Democratic base and providing fodder for rival Republicans as he deals with the realities of office.
News in the past week of the federal seizure of phone records from the Associated Press news agency and the Internal Revenue Service’s targeting of conservative Tea Party groups, has intensified criticism already simmering over the Guantanamo Bay prison camp and aerial drone strikes abroad.
Asked at a news conference on Tuesday why the administration had not done more for civil liberties, Attorney General Eric Holder said: “I’m proud of what we have done” and emphasized the administration’s shift from Bush era harsh interrogation practices of terrorism suspects that had drawn international criticism.
When he took office in 2009, Obama promised to close the Guantanamo camp for foreign terrorism suspects, but it remains open with 166 detainees, many on hunger strikes in protest at indefinite detentions. Obama said last month he would revisit that pledge and blamed Congress for blocking his plan to close the camp, partly through restrictions on transfers of detainees.
Let’s be very clear: because the Internal Revenue Service holds so much private data, and because it can make people’s lives absolutely miserable, it is of paramount importance in our political system that it both is, and is perceived as, an apolitical entity. If it discriminated against tea party groups that attempted to register as 501(c)4 social welfare organizations, then that’s a grave offense, and it needs to be investigated thoroughly and dealt with severely.
(Source: Andrew Harrer/Bloomberg)
But the particular bias people are angry about is the opposite of the bias they should be angry about. The problem wasn’t that the IRS was skeptical of tea party groups registering as 501(c)4s. It’s that it hasn’t been skeptical of Organizing for America, Crossroads GPS, Priorities USA and Heritage Action Fund registering as 501(c)4s. The IRS should be treating all these groups equally and appropriately — which would mean much more harshly.
Updated with the link
A First Amendment watchdog group is suing the Internal Revenue Service for failing to challenge the tax-exempt status of churches whose pastors engage in partisan politicking from the pulpit.
The Freedom From Religion Foundation, which advocates total separation of church and state, filed the lawsuit Wednesday (Nov. 14) in U.S. District Court in Western Wisconsin, where the 19,000-member organization is based.
The lawsuit claims that as many as 1,500 pastors engaged in ‘Pulpit Freedom Sunday’ on Sunday, Oct. 7, when pastors endorsed one or more candidates, which is a violation of IRS rules for non-profit organizations.
IRS rules state that organizations classified as 501 (c) (3) non-profits — a tax-exempt status most churches and other religious institutions claim — cannot participate or intervene in ‘any political campaign on behalf of (or in opposition to) any political candidate.’
James Timothy Turner, the self-styled “president” of the Republic for the united States of America (RuSA), was indicted today on charges of conspiracy to defraud the federal government and several other tax charges, including attempting to pay taxes with a fictitious financial instrument and attempting to obstruct an Internal Revenue Service investigation.
Based in the southeast Alabama town of Ozark, Turner heads what is likely the largest and most organized group of antigovernment “sovereign citizens” in the country.
According to the federal indictment announced Tuesday, Turner is alleged to have attempted to pay his own taxes with a fictitious $300 million bond and to have assisted others who wanted to get out of paying taxes with similar bonds ranging from $10 million to $300 million, the FBI said in a joint statement with the Internal Revenue Service and the Justice Department.
Turner burst onto the sovereign citizens scene in 2007 with a series of seminars claiming he could help his clients get out of paying mortgages, credit card debt and income tax bills. But with RuSA, which he formed in 2010, Turner went a step further, setting out to form a shadow government that he claimed would lie in waiting for the day the federal government crumbled.
On the face of it, Senator Harry Reid’s explosive but flimsily sourced claim that Mitt Romney paid no income tax seems preposterous. Mr. Romney has denied it, and without his returns no one can say for sure. But for someone who makes millions of dollars a year, would it even be possible?
The I.R.S. disclosed that six of the 400 people in the country with the highest gross income paid no federal income tax at all.
It so happens that this summer the Internal Revenue Service released data from the 400 individual income tax returns reporting the highest adjusted gross income. This elite ultrarich group earned on average $202 million in 2009, the latest year available. And buried in the data is the startling disclosure that six of the 400 paid no federal income tax.
The I.R.S. has never before disclosed that last fact.
Not even Mr. Romney, with reported 2010 income of $21.7 million, qualifies for membership in this select group of 400. But the data provides a window into the financial lives and tax rates of the superrich. Since the I.R.S. doesn’t release data for the tiny percentage of Americans at Mr. Romney’s income level, the 400 are the closest proxy.
The tax plan passed by Senate Democrats on Wednesday isn’t really about taxing the rich; it’s about taxing the megarich. As Timothy Noah has explained in the New Republic, the plan would actually reduce taxes on a lot of fairly rich people by renewing the (supposedly temporary) Bush-era tax cuts for everyone except those who make more than $250,000 a year. Even then, Democrats are only proposing a higher marginal tax rate, which means that even people raking in far more than $250,000 will still pay lower taxes on their first quarter million in annual earnings. Crunch the numbers, and it turns out that the biggest losers under the Senate plan are couples that earn more than $1 million a year—mostly multi-millionaires and billionaires.
While the Senate tax plan could certainly go further in taxing the rich, focusing on the megawealthy makes sense considering how much of our economy is now controlled by them. According to the Internal Revenue Service, there are 66,000 taxpayers who individually control $20 million or more in assets, and all these people put together are worth $4 trillion—more than the net worth of 70 percent of the US population.
The investment bank Credit Suisse, for its part, classifies “ultra high net worth individuals” as people with at least $50 million in assets—and according to the bank’s 2011 Global Wealth Databook, more of these UNHWIs live in the United States than anywhere else in the world (see chart above).
Four years after the Internal Revenue Service started requiring nonprofits to submit more information about their charitable and commercial activities, the agency still struggles to determine which income earned by colleges, hospitals, and other big institutions is taxable, an IRS official said today.
Steven T. Miller, deputy IRS commissioner, made the comment at a Congressional hearing devoted to an issue that has vexed lawmakers and regulators—how to ensure that charities pay taxes on income they generate through businesslike activities such as magazine publishing and retail sales.
Figuring out if an organization’s business income is “substantially related” to its charitable mission, and therefore tax-exempt, “is a remarkably difficult and soft sort of issue to deal with,” Mr. Miller told the oversight subcommittee of the House Ways and Means Committee. For example, the agency has to determine questions like whether to tax money a nonprofit museum earns from post cards sold in its gift shop, he said.
The rules governing unrelated business income taxes are an “ongoing source of confusion,” said Rep. Charles W. Boustany Jr., a Louisiana Republican who chairs the subcommittee, which oversees the IRS.
A 2008 Chronicle investigation found that more than half of 91 large charities with unrelated business activities reported overall losses or no taxable income. Many were taking advantage of vague language or exemptions built into the law to avoid paying taxes, it found.