[EL] why seek c4 recognition?

Tue May 14 14:42:39 PDT 2013

To add to this point, the IRS guidance on this issue appears to be
intentionally misleading.  For example, IRS Publication 557 says "If your
organization is not organized for profit and will be operated only to
promote social welfare to benefit the community, you should file Form 1024
to apply for recognition of exemption from federal income tax under section
501(c)(4)." (see page 51.)

I suspect that even most lawyers would read that statement as a description
of a legal requirement.  And why is the IRS advising organizations that
they "should" do something that isn't required by law?

Daniel

On Tue, May 14, 2013 at 2:18 PM, Bill Maurer <wmaurer at ij.org> wrote:

>  I’m speaking of small Tea Party groups.  You asked why so many decided
> to file that way—if you meant just those represented by counsel, then I
> can’t answer why those groups would do this and I don’t have any insight
> into what percentage of the groups targeted by the IRS had representation.
> The Tea Party groups I know that are (c)(4)’s don’t know Cleta Mitchell and
> couldn’t afford to hire the local solo practitioner, much less Ms.
> Mitchell.  Despite numerous attempts by various actors to portray of Tea
> Party groups as Astroturf agents of Karl Rove, many of these groups are
> very small, unsophisticated, and independent.  I think you are probably
> onto something with the word-of-mouth, though.****
>
> ** **
>
> And many small organizations do look at the Code and at the campaign
> finance laws and try to figure them out on their own.  That’s why they get
> in trouble—neither set of regulations are compatible with grassroots
> participation by small, unsophisticated groups.   ****
>
> ** **
>
> Bill****
>
> ** **
>
> *From:* Mark Schmitt [mailto:schmitt.mark at gmail.com]
> *Sent:* Tuesday, May 14, 2013 1:59 PM
> *To:* Bill Maurer; law-election at uci.edu
> *Subject:* Re: [EL] why seek c4 recognition?****
>
> ** **
>
> I take it you are saying that lawyers like Cleta Mitchell, who say they
> represent several dozen of these organizations, only got involved later?**
> **
>
> That may well be -- it would be interesting to learn more. ****
>
> I'm not sure that "looked at the Code" is really what most amateur
> organizations do, but they may operate by word-of-mouth about what they
> need to do. I know that I've encountered any number of c(3) groups that are
> convinced that they need to launch a c(4) in order to do any lobbying at
> all, which is a huge and expensive misconception.****
>
>
> ****
>
> Mark Schmitt
> Senior Fellow, The Roosevelt Institute<http://www.rooseveltinstitute.org/>
> 202/246-2350
> gchat or Skype: schmitt.mark
> twitter: mschmitt9 ****
>
> ** **
>
> On Tue, May 14, 2013 at 3:55 PM, Bill Maurer <wmaurer at ij.org> wrote:****
>
> You’re assuming that many Tea Party groups have advisors at all.  In my
> experience, they are small, dedicated political amateurs who don’t realize
> the breadth and scope of regulations governing both nonprofit status and
> what is necessary to participate in political and ideological discussions
> in this country.  They likely sought (c)(4) status because they looked at
> the Code and that designation seemed to fit them best.****
>
>  ****
>
> Bill****
>
>  ****
>
> *From:* law-election-bounces at department-lists.uci.edu [mailto:
> law-election-bounces at department-lists.uci.edu] *On Behalf Of *Mark Schmitt
> *Sent:* Tuesday, May 14, 2013 12:43 PM
> *To:* law-election at uci.edu
> *Subject:* Re: [EL] why seek c4 recognition?****
>
>  ****
>
>  ****
>
>  ****
>
> I'm curious, then: Does anyone know why so many local Tea Party groups did
> decide to file 1024's? I recall that long before last Friday, a number of
> lawyers on this list, esp. Mr. Zall, had said that they discourage (c)4
> clients from filing. Were the Tea Party groups just poorly advised? Was
> Cleta Mitchell's advice on whether groups should file different from other
> lawyers?****
>
>
> ****
>
> Mark Schmitt
> Senior Fellow, The Roosevelt Institute<http://www.rooseveltinstitute.org/>
> 202/246-2350
> gchat or Skype: schmitt.mark
> twitter: mschmitt9 ****
>
>  ****
>
> On Tue, May 14, 2013 at 3:19 PM, <JBoppjr at aol.com> wrote:****
>
> Beth is absolutely right, IMHO.  Jim Bopp****
>
>  ****
>
> In a message dated 5/14/2013 12:04:43 P.M. Eastern Daylight Time,
> bkingsley at harmoncurran.com writes:****
>
> For some groups the question is why seek recognition, not why not.
>
> The form takes time and energy to complete. If you don't know the lingo
> you risk saying something that raises a red flag and triggers further
> scrutiny, so you'll spend time and energy responding to further IRS
> inquiries. To avoid that you can hire a lawyer and spend thousands on legal
> fees. Plus it costs $850 just to file the application, for all but the very
> smallest groups.
>
> And what are the benefits? If the IRS ever happens to audit your group,
> you can rely on the determination to avoid retroactive revocation, provided
> there have been no material changes in operations. If you're pretty
> confident where you fit in the tax code, that benefit is pretty slim, and
> it can be easier just to start operating.
>
> Many groups do file a 1024, and of course my experience tends to be with
> those who decide to do so, since they've probably come to me for help.
> There are some ancillary benefits -- being able to provide assurances to
> funders and other supporters that you're operating within the law, or in
> some cases eligibility for local tax exemption. But for many the plusses
> are not worth the hassles.
>
> Beth
>
> Elizabeth Kingsley
> Harmon, Curran, Spielberg & Eisenberg, LLP
> 1726 M St., NW
> Suite 600
> Washington, DC 20036
> 202-328-3500
> www.harmoncurran.com
>
>
>
>
> -----Original Message-----
> From: law-election-bounces at department-lists.uci.edu [mailto:
> law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
> Sent: Tuesday, May 14, 2013 11:50 AM
> To: law-election at UCI.edu
> Subject: [EL] why seek c4 recognition?
>
> Over on Twitter the NYT's Nick Confessore is tweeting about the question
> why only some groups seek c4 recognition status. Apparently the
> Democratic-oriented Priorities USA has not.
>
> Can someone shed some light on the reasons why a group would not seek
> such recognition from the IRS and what the risks are?
>
> Thanks!
>
> Rick
>
> --
> Rick Hasen
> Chancellor's Professor of Law and Political Science
> UC Irvine School of Law
> 401 E. Peltason Dr., Suite 1000
> Irvine, CA 92697-8000
> 949.824.3072 - office
> 949.824.0495 - fax
> rhasen at law.uci.edu
> http://law.uci.edu/faculty/page1_r_hasen.html
> http://electionlawblog.org
>
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