Most of what you've read online about IRS problems is wrong, or at least misleading. I'm Darrin Mish. I practice tax law in Tampa and I've been doing this for 32 years. Here's what's actually true.<\/p>\n
Three non-profit organizations were denied tax exempt status by the IRS because they trained and recruited potential political candidates over the last few years. \u00a0The identities of the organizations and the political parties they supported are not known as the letter sent by the IRS and released last week was extensively edited. \u00a0Click here to watch or read more information on IRS Back Taxes.<\/a><\/p>\n The IRS letter said, \u201cYou are not operated primarily to promote social welfare because your activities are primarily for the benefit of a political party and a private group of individuals, rather than the community as a whole. \u00a0Accordingly, you do not qualify for exemption.\u201d
\nNon-profit organizations are known as 501(c)4s, after the section of the tax code that govern them. \u00a0In recent years, the IRS has seemed to be particularly scrutinizing such organizations. \u00a0The agency recently backed off inquiries into whether five major donors to such groups had paid gift taxes. \u00a0According to the IRS, it needed to develop a broader policy before taking any individual actions.
\nOver the years, non-profits that openly support political parties have been mushrooming and so have individuals who make donations or are affiliated with these organizations. \u00a0The billionaire Koch brothers and political strategist Karl Rove are among the noted ones linked with organizations that supported the Republican party in last year\u2019s mid-term elections. \u00a0Not to be outdone, similar organizations have been formed that support the Democratic party. \u00a0One such organization is the Democratic Leadership Council (DLC), once led by former President Bill Clinton, which recently folded up.
\nBut according to Al From, the DLC founder, state affiliated groups of national organizations like the DLC have brought more trouble than good. \u00a0\u201cIn the early 1990s, a lot of people wanted to organize chapters and we let them do that,\u201d From said. \u201cBut it caused so many problems that we severed all ties to them not long after that.\u201d
\nThe DLC had its tax exempt status revoked from 1997 to 1999 but subsequently, the US District Court for the District of Columbia overruled the IRS and restored the status of the DLC. \u00a0However, the organization folded up in February.
\nRegarding the three organizations that received tax-exempt rejection letters from the IRS<\/a>, many industry experts believe that they applied for the status already knowing the high possibility of rejection and ready to challenge the ruling in court. \u00a0Others believe otherwise, that the IRS ruling was a routine action.<\/p>\n