Tax Exemptions

It's strange how "scandal" gets defined these days in Washington. At the moment, everyone is screaming about the "scandal" of the Internal Revenue Service scrutinizing conservative nonprofits before granting them tax-exempt status. Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years. The bottom line first: The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity.

WASHINGTON - In spring 2010, agents in the Cincinnati office of the Internal Revenue Service, which handles applications for tax-exempt status, faced a surge of filings by new advocacy groups, with little guidance on how to treat them. Their decision to deal with the problem by singling out tea party and other conservative groups for extra scrutiny has now triggered a criminal inquiry, congressional investigations, the departure of two top IRS officials and the naming of a new acting commissioner Thursday.

The Internal Revenue Service has warned one of Southern California's largest and most liberal churches that it is at risk of losing its tax-exempt status because of an antiwar sermon two days before the 2004 presidential election. Rector J. Edwin Bacon of All Saints Episcopal Church in Pasadena told many congregants during morning services Sunday that a guest sermon by the church's former rector, the Rev. George F. Regas, on Oct. 31, 2004, had prompted a letter from the IRS.

WASHINGTON - The Justice Department began a criminal investigation Tuesday into overzealous scrutiny by the IRS of applications for tax exemptions by conservative groups, an improper targeting that an inspector general's report blamed on a confused staff and lax oversight. The improper activities "were not influenced by any individual or organization outside the IRS," the auditors said they were told by Internal Revenue Service officials. Instead, the report painted a picture of an IRS unit based in Cincinnati that used "inappropriate criteria" for deciding which applications to examine, without any review by senior managers.

We cannot allow the tax-exempt status of the private nonprofit organizations in our country to be compromised ("Losing Our T-Shirts to the Tax Man" by Michael McCloskey, Op-Ed Page, June 12). With the federal government seemingly withdrawing on all fronts from providing social services, cultural activities, and environmental conservation, we cannot at the same time eviscerate the very institutions which take up the slack. Volunteerism isn't free! It is clearly an American tradition to fund community activities by selling things, not just by donations.

Reporting from Sacramento California Treasurer Bill Lockyer on Tuesday will ask a state panel that hands out sales tax exemptions to renewable energy manufacturers to suspend the program in the wake of the Solyndra scandal. Lockyer, who heads the panel, said he will ask fellow members of the California Alternative Energy and Advanced Transportation Financing Authority at a meeting to not approve any new applications for tax exemptions. The program is aimed at encouraging the purchase of equipment used to make solar panels and other energy-saving projects.

Nodding to the beat of Irish folk ballads on the tape deck of a motor home plastered with political slogans, John Patrick Michael Murphy plied Colorado's interstates recently to preach his gospel: Churches and most nonprofit organizations should no longer be exempt from property taxes.

Assemblyman Tom Hayden (D-Santa Monica) said Thursday that he has asked state and federal tax officials to consider revoking the tax-exempt status of Soka University of Calabasas. Hayden, who is opposed to Soka's plans to build a 4,400-student campus on 580 acres it owns in the Santa Monica Mountains, also said he will introduce legislation to prevent Soka from calling itself a university.

Republican vice presidential nominee Dan Quayle, whose family controls a $1-billion newspaper empire, voted last year to exempt newsprint from a new federal tax on most imported products. Newsprint, the paper on which newspapers are printed, accounts for as much as 25% to 35% of the cost of putting out a daily.

The U.S. Catholic Church won a long-sought victory in the courts this week when a federal appeals panel here dismissed a suit filed by abortion-rights advocates challenging the church's tax exemption. The case began in 1981 when Abortion Rights Mobilization and 20 other individuals and groups challenged the tax-exempt status of the National Conference of Catholic Bishops and the U.S.

One of the great outrages of the Watergate scandal was President Nixon's use of the Internal Revenue Service to harass his political opponents. Yet some IRS officials appear to have forgotten what happens when tax law enforcers pick their targets based on their politics. A forthcoming report from the agency's inspector general is expected to describe how IRS employees inappropriately scrutinized grass-roots conservative groups that were seeking tax-exempt status. If that happened, it's unacceptable, and Congress should find out what involvement, if any, the Obama administration had in the abuses.

It's strange how "scandal" gets defined these days in Washington. At the moment, everyone is screaming about the "scandal" of the Internal Revenue Service scrutinizing conservative nonprofits before granting them tax-exempt status. Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years. The bottom line first: The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity.

WASHINGTON - Early last month, state lawyers and election officials around the country dialed into a conference call to talk about how to deal with the flood of secret money that played an unprecedented role in the 2012 election. The discussion, which included officials from California, New York, Alaska and Maine, was a first step toward a collaborative effort to force tax-exempt advocacy organizations and trade associations out of the shadows. The unusual initiative was driven by the lack of progress at the federal level in pushing those groups to disclose their contributors if they engage in campaigns, as candidates and political action committees are required to do. "There is no question that one of the reasons to have states working together is because the federal government, in numerous arenas, has failed to take action," said Ann Ravel, chairwoman of California's Fair Political Practices Commission, who organized the call with officials from about 10 states.

Private, tax-exempt hospitals spent an average of 7.5% of their operating expenses on community benefits in 2009, according to a new study that raises questions about whether the amount is enough. Overall, the study published Wednesday in the New England Journal of Medicine showed hospitals "varied widely" in the level of "community benefits" they provided, ranging from 20% of the operating budget at some to 1% at others. They concluded that most of the expenditures benefited patient care while "little was spent on community health improvement.

The Boy Scouts' long-standing refusal to admit gay members is deplorable and offensive. But it's also legal. Just because we - or California legislators - might disagree with the discriminatory path the Boy Scouts has taken doesn't mean the organization should be singled out from other nonprofits to lose its tax-exempt status. A bill that passed a state Senate committee this week would do just that. Under SB 323, , carried by Sen. Ricardo Lara (D-Bell Gardens), the Boy Scouts of America (though unnamed in the bill)

SACRAMENTO - Some California lawmakers seeking to pressure the Boy Scouts of America to abandon its ban on openly gay members are taking a novel approach: They are threatening to strip the organization of its state tax exemption. The proposal, which cleared a legislative hurdle Wednesday, once again puts California at the center of a national debate on gay rights, and it could put the state on a collision course with the IRS if passed. The legislation would revoke the exemption from state taxes for any nonprofit that excludes members by sexual orientation, gender identity or religious affiliation.

Should the state of California revoke the Boy Scouts of America's tax-exempt status? A state Senate committee recommended Wednesday that such status be revoked from nonprofit groups -- including the Boy Scouts of America -- that do not allow gays and transsexuals to become members. The Senate Governance and Finance Committee voted 5 to 2 along party lines, with Republicans in opposition, to approve the measure by Sen. Ricardo Lara (D-Bell Gardens). "The Boy Scouts provide a critical service for our youth," Lara told the committee.

A state Senate committee recommended Wednesday that California revoke the tax-exempt status of nonprofit groups including the Boy Scouts of America that do not allow gays and transsexuals to become members. The Senate Governance and Finance Committee voted 5-2 along party lines, with Republicans in opposition, to approve the measure by Sen. Ricardo Lara (D-Bell Gardens), even as one official from the Boy Scouts signaled that a change in policy may be in the works.. "The Boy Scouts provide a critical service for our youth," Lara told the committee.