IRS: Why did the Tea Parties even apply for 501(c)4 status?

Many aspects of the IRS – Tea Parties bruhaha have me head scratching.

Clearly, the IRS was targeting conservative groups.  That’s a no-brainer.

But, I ask, why did the groups apply for 501(c)4 status in the first place?

Reading the IRS regs and a letter from the IRS to Senator Hatch, organizations can “self-declare” to be 501(c)4.

Source: Original letter

Here’s why this has me head-scratching …

English translation: The groups can just say that they’re 501(c)4 and start acting and reporting like 501(c)4 organizations.

Worst case?

They get audited, have their 501(c)4 status rejected, and have to pay back taxes.

But, what taxes would there be?

I assume that the Tea Parties really do operate as not-for-profits … using all of their revenue (donations) to fund their activities.

With no income (profits) there isn’t any income tax, right?

So, why apply?

And, more to the point, why stop operating while the IRS sits on your application?

Doesn’t make sense to me …

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One Response to “IRS: Why did the Tea Parties even apply for 501(c)4 status?”

  1. Ivan Says:

    Nothing to do with taxes, but as 501c4, they don’t have to disclose donors.

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