IRS problems aren't as complicated as they look once you see the structure. I'm attorney Darrin Mish. I've represented taxpayers before the IRS for three decades \u2014 in Florida, Colorado, Texas, and internationally. Here's the plain-English breakdown.<\/p>\n
The recent action of the IRS to deny tax-exempt status to three hitherto unnamed non-profit political advocacy groups has set tongues wagging in the industry. \u00a0Now it has been revealed that all three groups were all part of Emerge America, an organization devoted to cultivating female political leaders for local, state and federal government. \u00a0The three groups are Emerge Maine, Emerge Nevada and Emerge Massachusetts.
\nThe IRS issued letters to all three Emerge groups stating their tax-exempt status has been declined due to the fact that they were set up to train Democrat political leaders. \u00a0On their websites, each of the three groups asks for evidence that the candidates for training are Democrats.
\nThe IRS action on these three groups have sparked concerns among other fellow 501(c)(4) groups \u2013 organizations set up under Section 501(c)4 as non-profit groups under the tax code \u2013 whether such action will be taken against them as well.
\nOne such 501(c)(4) group is Crossroads GPS, a conservative political advocacy group associated with Karl Rove, the GOP political advisor and strategist. \u00a0Crossroads sent an email to their supporters last week assuring them they were not one of the three groups denied tax-exempt status by the IRS.
\nEmerge America president, Karen Middleton, confirmed the three Emerge groups had been denied tax-exempt status. \u00a0She added that the groups are at present in the process of converting into 527 organizations, that are also tax-exempt but obligated to disclose their donors (501(c)(4) groups are not required to).
\n\u201cWe\u2019re all small organizations,\u201d Ms. Middleton said. \u201cWe train about 25 Democratic women each year in each state where we work, and we don\u2019t engage in any work that involved candidates or campaigns.\u201d
\nIn a strange twist of events, the IRS approves the tax-exempt status of five other Emerge groups namely Emerge Kentucky, Emerge California, Emerge New Mexico, Emerge Wisconsin and Emerge Arizona. \u00a0Kimberly Ellis from Emerge California had this to say, \u201cIt\u2019s just bizarre. \u00a0Nevada has been around and waiting for approval for the last five years, and in the interim, Oregon and Kentucky are established and file for their approval \u2014 and Kentucky gets it but Nevada, Maine and Massachusetts don\u2019t.\u201d
\nThe IRS has declined to comment on this matter. \u00a0But according to Paul Streckfus, a former IRS official, such inconsistencies could be due to the fact that among the thousands of applications for tax exemption from non-profits received by the IRS every day, the applications from Emerge could have been channeled to different IRS offices.<\/p>\n