Tax Exempt Organizations and Political Activity - Should It Be Allowed?

Fern

Elite Member
Sep 30, 2003
26,907
173
106
In discussions of the IRS scandal in their tax exempt unit, many people have insisted that tax exempt organizations should NOT be allowed to have political activity.

Up till this point this has involved 501 (c)(4) tax exempt organizations.

I'd like to ask those people if they feel the same way about 501 (c)(5) organizations. Should they also be prohibited from political activity?

And please explain your position.

TIA

Fern
 

ivwshane

Lifer
May 15, 2000
32,534
15,417
136
What's the difference between the two? There are already a ton of ways to be tax exempt, the issue with the 501c4's is the anonymous donor part.

If money is free speach then we should have the right to know where political money is coming from.
 

BoberFett

Lifer
Oct 9, 1999
37,562
9
81
I don't think any organizations should be exempt. If the idea is that taxes pay for the infrastructure to support that organization, current tax exempts use infrastructure too. It's just a cost of being a part of living in a first world nation (or so we're told) so suck it up and pay like the rest of us.
 

zinfamous

No Lifer
Jul 12, 2006
111,133
30,084
146
what constitutes a (c)(5)? are these the empty shell companies empowered by Citizens United to endlessly fund political drivel from the bottomless fortunes of a handful of plutocrats? Then no, I don't think they should enjoy tax exempt status. There is an obvious conflict of interest and considering that they are now legally sheltered from revealing the nature of this ethical breach, it made all the more worse.

Or are these religious institutions? Frankly, I understand the value of allowing religious groups to enjoy tax free-ownership, as they provide direct service to their communities via charity and social welfare and service. I think this is a fine tradition and should continue.

However, the moment any single parish begins to advertise on a billboard about political issues, or a minister preaches from the pulpit during worship urging their congregation to vote in x manner, then such status should be removed and they should be designated as a political outreach entity, and not a religious house of worship.
 

nehalem256

Lifer
Apr 13, 2012
15,669
8
0
I think the best solution is to remove tax deductions for donations to non-profits

Then allow all charities, political advocacy groups, churches etc to not pay taxes on their income. This removes all political issues of trying to decide which groups are "worthy", or which groups are technically crossing the line into engaging in political speech.

Essentially all non-profit groups would be a way for individuals to pool money they have already paid income taxes on for a common purpose.

Non-profit groups should still be expected to pay property, sales taxes, etc.
 

Fern

Elite Member
Sep 30, 2003
26,907
173
106
I think the best solution is to remove tax deductions for donations to non-profits

Then allow all charities, political advocacy groups, churches etc to not pay taxes on their income. This removes all political issues of trying to decide which groups are "worthy", or which groups are technically crossing the line into engaging in political speech.

Essentially all non-profit groups would be a way for individuals to pool money they have already paid income taxes on for a common purpose.
-snip-

Actually, that's how it is now.

Those nonprofit groups whose donors are allowed a deduction are prohibited from any political activity.

And if donations to a group (in this a case a labor union) are generally deductible, any portion of which that used for lobbying etc must listed separately and is not deductible.

Fern
 

etrigan420

Golden Member
Oct 30, 2007
1,723
1
71
Labor unions.

Fern

Wait, are labor unions exempt too?

Who the hell *is* paying taxes in this country? (That's a joke...kinda :\)

I honestly don't know enough about the intricacies of the tax code to speak on who should and should not be exempt...which I believe is actually a big part of the problem.

Like Zin, I can see the value in allowing churches to be exempt, but show me a pastor who's *not* politicizing the pulpit and I'll show you a Unicorn with a Mermaid, a Chupacabra, and a Leprechaun on it's back.

That Colbert Report episode where he talks to that guy about what he can and can't do with the remainder of his Super-PAC money was hilariously disgusting.
 

Fern

Elite Member
Sep 30, 2003
26,907
173
106
Wait, are labor unions exempt too?

Who the hell *is* paying taxes in this country? (That's a joke...kinda :\)

I honestly don't know enough about the intricacies of the tax code to speak on who should and should not be exempt...which I believe is actually a big part of the problem.

Yes.

All 501 (c) organizations are considered tax exempt.

Like Zin, I can see the value in allowing churches to be exempt, but show me a pastor who's *not* politicizing the pulpit and I'll show you a Unicorn with a Mermaid, a Chupacabra, and a Leprechaun on it's back.

I've never been to a church where anything of a political nature was discussed. Not even abortion etc.

That Colbert Report episode where he talks to that guy about what he can and can't do with the remainder of his Super-PAC money was hilariously disgusting.

I assume Colbert wasn't talking to a lawyer, in which case it's a safe bet the guy had no f'ing clue; the rules get complicated

Fern
 

IndyColtsFan

Lifer
Sep 22, 2007
33,655
687
126
I don't think any organizations should be exempt. If the idea is that taxes pay for the infrastructure to support that organization, current tax exempts use infrastructure too. It's just a cost of being a part of living in a first world nation (or so we're told) so suck it up and pay like the rest of us.

:thumbsup:
 

BlueWolf47

Senior member
Apr 22, 2005
653
0
76
Yes.

All 501 (c) organizations are considered tax exempt.



I've never been to a church where anything of a political nature was discussed. Not even abortion etc.



I assume Colbert wasn't talking to a lawyer, in which case it's a safe bet the guy had no f'ing clue; the rules get complicated

Fern

Actually the guy he was talking to was Trevor Potter. He is a very distinguished lawyer who specializes in lobbying, campaign finance regulations, and federal compliance/disclosure laws. He served as general counsel for mccain in 2000 and 2008. He also served as general counsel for George H. W. Bush in 1988.


He worked as Colbert's superpac lawyer and the two of them showed how ridiculous 501c4's are. Basically after citizens united, any individual or corporation can donate or take donations tax free in unlimited amounts through 501c4s. Nothing has to be reported to the irs or disclosed and they can spend the money however they want. It's basically a way for corporations or wealthy people to promote causes that would otherwise damage their image if they had to openly disclose.

The best example is Americans for Prosperity who promote climate change denial under their motto of free market capitalism.
 

lagokc

Senior member
Mar 27, 2013
808
1
41
I don't think any organizations should be exempt. If the idea is that taxes pay for the infrastructure to support that organization, current tax exempts use infrastructure too. It's just a cost of being a part of living in a first world nation (or so we're told) so suck it up and pay like the rest of us.

Pretty much this. No organisations should be tax exempt. That effectively includes churches. Just because someone else thinks that X organisation is doing good charity work doesn't mean that everyone else should have to pay for it through subsidizes taxes. And no, not all churches engage in charity and no church uses 100% of their funds for charity work.
 

monovillage

Diamond Member
Jul 3, 2008
8,444
1
0
Political speech is protected speech under the 1st Amendment. The power to tax political speech would be the power to destroy political speech. After seeing the insane abuses by the IRS under the Obama administration I can see why the Supreme Court had to rule the way they did in the Citizens United case.
 

lagokc

Senior member
Mar 27, 2013
808
1
41
Political speech is protected speech under the 1st Amendment. The power to tax political speech would be the power to destroy political speech. After seeing the insane abuses by the IRS under the Obama administration I can see why the Supreme Court had to rule the way they did in the Citizens United case.

You raise a valid case if the IRS is put into the position of determining if an organisation is making political speech and taxing them accordingly. The only viable solution is to tax everyone the same.
 

monovillage

Diamond Member
Jul 3, 2008
8,444
1
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You raise a valid case if the IRS is put into the position of determining if an organisation is making political speech and taxing them accordingly. The only viable solution is to tax everyone the same.

The IRS was only investigating and wanting to tax conservative/Republican speech, not political speech in general. So, no to taxes on any political speech.
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
I think the only non-profits should be organizations that feed, clothe, and provide shelter for the Poor. Whenever an organization endorses a candidate or a political party they should lose their status, including Churches. Political donations should still be considered freedom of speech and as such not be taxed if within limits. This only applies to donations to a candidate. However, political parties and other organizations should not be allowed tax free donations. That should not be protected. All gifts that are not donations like from corporations over $5.00 should be considered income.

Part of my reasoning is that if you can not vote, you should not be allowed to make tax free donations to a candidate. Unions cant vote, Corporations cant vote, companies cant vote, organizations cant vote. So these entitties get no say in the process. Only constituants vote, and only constituants should be able to make donations.
 
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nehalem256

Lifer
Apr 13, 2012
15,669
8
0
Political speech is protected speech under the 1st Amendment. The power to tax political speech would be the power to destroy political speech. After seeing the insane abuses by the IRS under the Obama administration I can see why the Supreme Court had to rule the way they did in the Citizens United case.

Which is why suggested that the non-profit organizations be free of income tax, but that the money donated would not give the individual a tax donation.

It seems the easiest way to keep either political party from taxing groups it didn't like.

In effect the organizations would just be a way to pool the taxed money of individuals for advocacy purposes.
 

lagokc

Senior member
Mar 27, 2013
808
1
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The IRS was only investigating and wanting to tax conservative/Republican speech, not political speech in general. So, no to taxes on any political speech.

The trouble is, someone needs to be around to determine what speech is considered political. The better solution is to tax the same no matter what anyone says.
 

werepossum

Elite Member
Jul 10, 2006
29,873
463
126
Pretty much this. No organisations should be tax exempt. That effectively includes churches. Just because someone else thinks that X organisation is doing good charity work doesn't mean that everyone else should have to pay for it through subsidizes taxes. And no, not all churches engage in charity and no church uses 100% of their funds for charity work.
How would we determine a church's taxable income? Given that a large portion of churches' missions is charity, would this not be an expense?

Political speech is protected speech under the 1st Amendment. The power to tax political speech would be the power to destroy political speech. After seeing the insane abuses by the IRS under the Obama administration I can see why the Supreme Court had to rule the way they did in the Citizens United case.
Quite true. I previously believed that while free speech was protected, anonymous free speech was not guaranteed. But after seeing this schedule it's apparent why anonymity is necessary to the political process.

As far as whether 501(C) groups should be allowed to conduct political activity, why don't we first see if we can get groups conducting political activity off the public teat?
 

ivwshane

Lifer
May 15, 2000
32,534
15,417
136
Labor unions.

Fern

Do they have to disclose who their donors are?

I'd prefer unions didn't do anything political but then that would conflict with one of their primary functions, keeping their members employed.

Personally I don't agree that money is speech so I wouldn't give tax breaks to any politically related entity.
 
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BlueWolf47

Senior member
Apr 22, 2005
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How would we determine a church's taxable income? Given that a large portion of churches' missions is charity, would this not be an expense?


Quite true. I previously believed that while free speech was protected, anonymous free speech was not guaranteed. But after seeing this schedule it's apparent why anonymity is necessary to the political process.

As far as whether 501(C) groups should be allowed to conduct political activity, why don't we first see if we can get groups conducting political activity off the public teat?

You think political donations and spending should be more anonymous than it already is????? Did your brain experience oxygen deprivation when you came to this conclusion?
 

BlueWolf47

Senior member
Apr 22, 2005
653
0
76
Do they have to disclose who their donors are?

Yes, unions must disclose any donation that is above $5000 dollars. It makes large donations to unions very unpopular when a corporation can donate as much as they want to a 501c4 and never have to submit any disclosure.
 

monovillage

Diamond Member
Jul 3, 2008
8,444
1
0
Do they have to disclose who their donors are?

I'd prefer unions didn't do anything political but then that would conflict with one of their primary functions, keeping their members employed.

Personally I don't agree that money is speech so I wouldn't give tax breaks to any politically related entity.

I don't believe that burning a flag is speech either, but it's still protected political speech according to the USSC.