501 (c) (4) Non-profit Social Welfare Organizations — Tea Party, Conservatives, Religious, Pro Life, Constitutionalists, Libertarians Targeted By IRS — Videos

Posted on May 22, 2013. Filed under: American History, Blogroll, Business, Communications, Economics, Education, Federal Government, government spending, history, Investments, Law, liberty, Life, Links, People, Philosophy, Politics, Rants, Raves, Video | Tags: , , , , , , , , , , , , , , , |



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Tea Party Targeted by IRS Who Was Responsible-

Rand Paul Discusses IRS Targetting Scandal w/ Neil Cavuto on FOX (5-21-13)

The IRS Scandal – Who Knew What When?

Norquist: Obama responsible for IRS targeting

Glenn Beck – IRS targeted conservatives

Glenn Beck – Lois Lerner, IRS dodge questions

IRS Commissioner: “It Is Absolutely Not” Illegal For IRS To Target Conservatives

Using the IRS Issues as a Political Weapon  Jenny Beth Martin Fox & Friends 051313

Who’s pulling the 501(c)(4)s’ strings?

What exactly is a 501(c)(4)?

IRS’s Tea-Party AUDIT: Explaining a 501(c)(3) and 501(c)(4)

NBC Owner Part Of Group Pushing New Obama 501c(4)

IRS in the spotlight: What’s a 501(c)(4)? By Martina Stewart, CNN

IRS Tea Party Scandal GOP Calling for Full Investigation

The Colbert Report 5/20/13 in :60 Seconds

Senator Menendez Speaks about 501(c)(4)s

The GOP has a “Liberal” Interpretation of IRS Law

Ex IRS agent Tells It all

Don’t Focus on Super Pacs.  Focus on 501(c)(4)’s — Dwyer /

Rep. Mike Kelley Destroys IRS Comm. Steven Miller

Types of Organizations Exempt under Section 501(c)(4)

Internal Revenue Code section 501(c)(4) provides for the exemption of two very different types of organizations with their own distinct qualification requirements. They are:

  • Social welfare organizations: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, and
  • Local associations of employees, the membership of which is limited to the employees of designated person(s) in a particular municipality, and the net earnings of which are devoted exclusively for the promotion of social welfare.

Homeowners associations and volunteer fire companies may be recognized as exempt as social welfare organizations if they meet the requirements for exemption. Organizations that engage in substantial lobbying activities sometimes also are classified as social welfare organizations.

Additional information

Social welfare organization – Examples


Social Welfare Organizations

To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare. The earnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction. See Introduction to IRC 4958 for more information about this excise tax. For a more detailed discussion of the exemption requirements for section 501(c)(4) organizations, see IRC 501(c)(4) Organizations. For more information about applying for exemption, see Application for Recognition of Exemption.

To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify as a section 501(c)(4) organization. Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, because its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. An organization is not 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 operated for profit link].

Seeking legislation germane to the organization’s programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax. For more information, see Lobbying Issues .

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. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f). For further information regarding political and lobbying activities of section 501(c) organizations, see Election Year Issues, Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations, and Revenue Ruling 2004-6.


Application for recognition of exemption

To apply for recognition by the IRS of exempt status under section 501(c) of the Internal Revenue Code, most organizations use Form 1023, Application for Recognition of Exemption and the related instructions. (Organizations applying for recognition of exemption under a provision other than section 501(c)(3) generally use Form 1024.) The application must be complete and accompanied by the appropriate user fee. See Application Process for a step-by-step review of what an organization needs to know and to do in order to apply for recognition by the IRS of tax-exempt status. Frequently asked questions about applying for exemption are also available.

The organization should also request an employer identification number, even if it does not have any employees. See Form SS-4, Application for Employer Identification Number, and its instructions to learn how to obtain an EIN. You may also obtain an EIN via telephone, by calling 1-800-829-4933, or by applying online.

A tax-exempt organization must make available for public inspection its approved application for recognition of exemption with all supporting documents available and its last three annual information returns. The organization must provide copies of these documents upon request without charge (other than a reasonable fee for reproduction and copying costs). Penalties are provided for failure to comply with these requirements.

Additional information:


Exempt Organization Public Disclosure and Availability Requirements

Tax-exempt organizations must make annual returns and exemption applications filed with the IRS available for public inspection and copying upon request. In addition, the IRS makes these documents available. The questions below relate to the public disclosure and availability of documents filed by tax-exempt organizations with the IRS.

A. Questions about Requirements for Exempt Organizations to Disclose IRS Filings to the General Public

  1. In general, what public disclosure requirements apply to tax-exempt organizations?
  2. tax-exempt organizations for purposes of the law requiring that certain tax documents be disclosed and copies of those documents be provided to persons requesting them?”>What organizations are tax-exempt organizations for purposes of the law requiring that certain tax documents be disclosed and copies of those documents be provided to persons requesting them?
  3. What tax documents must an exempt organization make available for public inspection and copying?
  4. What does the disclosure law require a tax-exempt organization to do?
  5. What does the IRS consider to be a reasonable charge for copying costs, which an exempt organization may charge for copies of tax documents covered by public disclosure requirements?
  6. What are our organization’s public disclosure obligations for the Form 990?
  7. Are organizations that are not required to provide copies of their exemption applications also exempt from the requirement to provide copies of annual returns to requesters?
  8. What disclosure laws apply to private foundations?
  9. Is a tax-exempt organization required to disclose the names or addresses of its contributors?
  10. Is there an exception to the requirement that an exempt organization provide copies of its exemption application and annual returns?
  11. widely available must it make the documents available for public inspection?”>If an organization makes it documents widely available must it make the documents available for public inspection?
  12. What are the penalties for failure to comply with the disclosure requirements, and who must pay them?
  13. If a request for copies of exempt organizations documents is not fulfilled, to whom may the requester complain?
  14. What disclosures is a charitable organization required to make to its donors?
  15. What disclosures must an exempt organization, other than a charity, make to its donors?
  16. Is personal identifying information provided on an exempt organization return subject to public disclosure?
  17. How can I obtain a copy of an organization’s annual return or exemption application?
  18. What should I do if an exempt organization will not let me see its Form 990 or 990-T returns or exemption application materials?
  19. e-Postcard?”>How will the public get access to information on the e-Postcard?

B. Questions about Requirements that the IRS Make Exempt Organizations Filings Available for Public Inspection and Copying

  1. How can one get a copy of an organization’s exemption application or annual information return from the IRS?
  2. Is personal identifying information provided on an exempt organization return subject to public disclosure?
  3. e-Postcard?”>How will the public get access to information on the e-Postcard?

View and print all FAQs (Adobe).


What is a 501(c)(4), anyway?

By Sean Sullivan,

The news that the Internal Revenue Service flagged conservative groups for extra scrutiny has drawn renewed public attention to 501(c)(4) organizations, which play a very influential role in politics. So, what the heck is a 501(c)(4), and why do such groups matter in electoral politics? If you’re curious, keep reading.

Typically referred to as “social welfare” groups, these are nonprofit organizations including civic leagues or local volunteer fire departments, for example, that in theory are designed to promote, well, social welfare causes. “501(c)” is just the IRS’s designation in the tax code for nonprofit groups, and (4) is the subsection of groups we are concerned with here. There are other types of nonprofits that fall under the “501(c)” umbrella, but they are subject to different requirements.

Here’s the official IRS definition, if you’re interested in reading more.

So where is the connection to electoral politics? Aren’t we talking about social welfare advocacy?

These groups are allowed to to participate in politics, so long as politics do not become their primary focus. What that means in practice is that they must spend less than 50 percent of their money on politics. So long as they don’t run afoul of that threshold, the groups can influence elections, which they typically do through advertising. The above “Colbert Report” segment sheds some more light on the nature 501(c)(4)s.

Give me some examples of 501(c)(4)s.

Crossroads GPS, the conservative group co-founded by Karl Rove is one well-known example. On the other end of the political spectrum is Organizing for Action, which is what President Obama’s campaign operation turned into after the 2012 election. Often, organizations will have multiple arms, including a nonprofit and a super PAC. American Crossroads, for example, is a super PAC affiliated with Crossroads GPS.

How much money are they spending?

A lot. And much of is being dished out by conservative groups. According to the Center for Responsive Politics, conservative nonprofits spent more than $263 million during the 2012 campaign, while liberal counterparts spent close to $35 million. A separate Center For Responsive Politics/Center for Public Integrity study found that in 2010, the social welfare nonprofits outspent super PACs by a 3-2 margin.

You mentioned super PACs? What’s the difference?

Here’s the key difference: Super PACs must disclose their donors while 501(c)(4)s do not. If you are a donor looking to influence election but do not want to reveal your identity, the 501(c)(4) is an attractive option through which to send your cash.

Why has the IRS gotten so many 501(c)(4) applications in recent years?

In 2010, the Supreme Court’s landmark “Citizens United” decision cleared the way for corporations and labor unions to raise and spend unlimited sums of money, and register for tax-exempt status under section 501(c)(4). So what happened next is not surprising. The IRS was flooded with applications from groups seeking the special 501(c)(4) designation. Applications more than doubled following the High Court’s ruling.

So which groups did the IRS single out?

In short, conservative ones. The IRS says it flagged groups with “tea party” and “patriot” in their names for extra scrutiny. The agency apologized and said partisanship did not motivate the tactics; rather, it was a misguided effort to come up with an efficient way to deal with the influx of applications. In addition, an inspector general’s report set to be released this week says the agency also gave extra scrutiny to groups that criticized the government and sought to educate Americans about the U.S. Constitution.

What’s next?

A lot more questions are going to be asked. Two congressional committees — the House Oversight and Government Reform Committee and the House Ways and Means Committee — are planning further investigations. The IG’s report will be released on Wednesday, which will shed more light on who in the IRS knew what and when they knew it.

Congressional Republicans and even some Democrats are up in arms. President Obama called it ”outrageous.” After a lot of review, look for officials and lawmakers to propose remedies to prevent this kind of thing from happening again.


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