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Section 1.501(c)(4)-1 Civic organizations and local associations of employees.
(a) Civic organizations --
(1) In general. A civic league or organization may be exempt as an organization described in section 501(c)(4) if--
(i) It is not organized or operated for profit; and
(ii) It is operated exclusively for the promotion of social welfare.
(2) Promotion of social welfare --
(i) In general. An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements. A social welfare organization will qualify for exemption as a charitable organization if it falls within the definition of charitable set forth in paragraph (d)(2) of Section 1.501(c)(3)-1 and is not an action organization as set forth in paragraph (c)(3) of Section 1.501(c)(3)-1.
(ii) Political or social activities. 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. Nor is an organization operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations which are operated for profit. See, however, section 501(c)(6) and Section 1.501(c)(6)-1, relating to business leagues and similar organizations. A social welfare organization that is not, at any time after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3) may qualify under section 501(c)(4) even though it is an action organization described in Section 1.501(c)(3)-1(c)(3)(ii) or (iv), if it otherwise qualifies under this section. For rules relating to an organization that is, after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3), see section 504 and Section 1.504-1.
(b) Local associations of employees . Local associations of employees described in section 501(c)(4) are expressly entitled to exemption under section 501(a). As conditions to exemption, it is required (1) that the membership of such an association be limited to the employees of a designated person or persons in a particular municipality, and (2) that the net earnings of the association be devoted exclusively to charitable, educational, or recreational purposes. The word local is defined in paragraph (b) of Section 1.501(c)(12)-1. See paragraph (d) (2) and (3) of Section 1.501(c)(3)-1 with reference to the meaning of charitable and educational as used in this section.
[T.D. 6500, 25 FR 11737, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 8308, 55 FR 35588, Aug. 31, 1990]
Here's the problem. The Code section and regulation involved are (emphasis mine):
As should be apparent, the Code section passed by Congress in 1954 is pretty clear that political activity is prohibited. But the 1960 regulation introduced a bit of ambiguity. After Citizens' United a lot of folks thought that a 501(c)(4) could operate as a non-profit (pay no tax), accept unlimited politically motivated donations with no reporting requirement and total secrecy, and spend the money on obvious campaign ads without limitation.Section 1.501(c)(4)-1 Civic organizations and local associations of employees.
(a) Civic organizations --
(1) In general. A civic league or organization may be exempt as an organization described in section 501(c)(4) if--
(i) It is not organized or operated for profit; and
(ii) It is operated exclusively for the promotion of social welfare.
(2) Promotion of social welfare --
(i) In general. An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements. A social welfare organization will qualify for exemption as a charitable organization if it falls within the definition of charitable set forth in paragraph (d)(2) of Section 1.501(c)(3)-1 and is not an action organization as set forth in paragraph (c)(3) of Section 1.501(c)(3)-1.
(ii) Political or social activities. 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. Nor is an organization operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure, or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations which are operated for profit. See, however, section 501(c)(6) and Section 1.501(c)(6)-1, relating to business leagues and similar organizations. A social welfare organization that is not, at any time after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3) may qualify under section 501(c)(4) even though it is an action organization described in Section 1.501(c)(3)-1(c)(3)(ii) or (iv), if it otherwise qualifies under this section. For rules relating to an organization that is, after October 4, 1976, exempt from taxation as an organization described in section 501(c)(3), see section 504 and Section 1.504-1.
(b) Local associations of employees . Local associations of employees described in section 501(c)(4) are expressly entitled to exemption under section 501(a). As conditions to exemption, it is required (1) that the membership of such an association be limited to the employees of a designated person or persons in a particular municipality, and (2) that the net earnings of the association be devoted exclusively to charitable, educational, or recreational purposes. The word local is defined in paragraph (b) of Section 1.501(c)(12)-1. See paragraph (d) (2) and (3) of Section 1.501(c)(3)-1 with reference to the meaning of charitable and educational as used in this section.
[T.D. 6500, 25 FR 11737, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 8308, 55 FR 35588, Aug. 31, 1990]
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Actually, that isn't the problem. The problem actually lies here.
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
This specifically prohibits Congress making laws that regulate speech, even if the people doing the speaking are part of a tax exempt group. Putting the IRS in charge of regulating speech through the tax code is a violation of the Constitution.
So who authorized the subpoenas that only Holder could authorize?
You have no way of knowing this but Eric Holder is the Attorney General of the United States.
Actually, that isn't the problem. The problem actually lies here.
This specifically prohibits Congress making laws that regulate speech, even if the people doing the speaking are part of a tax exempt group. Putting the IRS in charge of regulating speech through the tax code is a violation of the Constitution.Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
I'm having a hard time following your argument. Is it that any organization has a right to not be taxed in order to exercise its First Amendment free speech rights? If so would that make taxation of anybody unconstitutional because it restricts their free speech rights?
Tea Partiers and Tax Exemption: The Real I.R.S. Scandal : The New Yorker
The real crime is that groups like blatantly political Tea Party wackos are allowed to register as "Social Welfare" organizations instead of as political action groups which is what they are, so they don't have to list their donors and can attain tax exempt status.
Karl Rove got away with it.
And, keep in mind that the teepotty is just a front for the Koch's.
Very few people wouldn't like to see the IRS brought up short.
Tea Partiers and Tax Exemption: The Real I.R.S. Scandal : The New Yorker
The real crime is that groups like blatantly political Tea Party wackos are allowed to register as "Social Welfare" organizations instead of as political action groups which is what they are, so they don't have to list their donors and can attain tax exempt status.
Tea Partiers and Tax Exemption: The Real I.R.S. Scandal : The New Yorker
The real crime is that groups like blatantly political Tea Party wackos are allowed to register as "Social Welfare" organizations instead of as political action groups which is what they are, so they don't have to list their donors and can attain tax exempt status.
Yeah well they ain't no ACORN to commit election fraud as well.
