Reason.com: IRS Admits Targeting Tea Party Groups During 2012 Elections (Updated with Actual Letters)

"Oh, boo yourself!"

In early 2012 several conservative groups of the Tea Party persuasion reported they were getting strange letters from the IRS demanding more information than they believed typical for 501(c)4 non-profit political groups — sometimes hundreds of pages more. Fox News reportedback then:

In letters sent from IRS offices in Cincinnati earlier this month, chapters including the Waco (Texas) Tea Party and the Ohio Liberty Council were asked to provide a list of donors, identify volunteers, financial support for and relationships with political candidates and parties, and even printed copies of their Facebook pages.

“Some of what they (the IRS) asked was reasonable, but there were some requests on there that were strange,” Toby Marie Walker, president of the Waco Tea Party told FoxNews.com. “It makes you wonder if they do this to groups like ACORN or other left-leaning groups.”

Were they really being targeted or were they just being paranoid about tiresome, exhaustive but actually common IRS bureaucratic meddling? Turns out they were being targeted, after all. Today, an IRS head admitted as much and apologized. Via the Associated Press:

Lois Lerner, who heads the IRS unit that oversees tax-exempt groups, said organizations that included the words “tea party” or “patriot” in their applications for tax-exempt status were singled out for additional reviews.

Lerner said the practice, initiated by low-level workers in Cincinnati, was wrong and she apologized while speaking at a conference in Washington.

I’m sure a stern memo was sent out to all involved.

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The Liberty Report Take: While one can certainly question the Citizens United Supreme Court Decision essentially allowing groups to declare themselves a charity to receive tax-exempt status while still having their basic function to support specific parties and candidates through media advertisements, the fact remains that all political parties are involved in this practice.  Liberals like Bill Burton and Neo-Cons like Karl Rove have practived this as have super-pacs.  But to single out people with a specific political leaning is beyond wrong and is yet another move to a Police State, Big Government, Big Brother USA.

Click the link below for the full article including actual letters.

http://reason.com/blog/2013/05/10/irs-admits-targeting-tea-party-groups-du

ABC News: IRS apologizes for targeting conservative groups

The Tea Party Gets an Apology from the IRS

The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status, a top IRS official said Friday.

Organizations were singled out because they included the words “tea party” or “patriot” in their applications for tax-exempt status, said Lois Lerner, who heads the IRS division that oversees tax-exempt groups.

In some cases, groups were asked for their list of donors, which violates IRS policy in most cases, she said.

“That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review,” Lerner said at a conference sponsored by the American Bar Association.

“The IRS would like to apologize for that,” she added.

Lerner said the practice was initiated by low-level workers in Cincinnati and was not motivated by political bias. After her talk, she told The AP that no high level IRS officials knew about the practice.

Agency officials found out about the practice last year and moved to correct it, the IRS said in a statement. The statement did not specify when officials found out.

About 75 groups were inappropriately targeted. None had their tax-exempt status revoked, Lerner said.

Senate Republican Leader Mitch McConnell of Kentucky called on the White House to investigate.

“Today’s acknowledgement by the Obama administration that the IRS did in fact target conservative groups in the heat of last year’s national election is not enough,” McConnell said. “I call on the White House to conduct a transparent, government-wide review aimed at assuring the American people that these thuggish practices are not under way at the IRS or elsewhere in the administration against anyone, regardless of their political views.”

Many conservative groups complained during the election that they were being harassed by the IRS. They accused the agency of frustrating their attempts to become tax exempt by sending them lengthy, intrusive questionnaires.

The forms, which the groups made available at the time, sought information about group members’ political activities, including details of their postings on social networking websites and about family members.

Certain tax-exempt charitable groups can conduct political activities but it cannot be their primary activity.

IRS Commissioner Douglas Shulman told Congress in March 2012 that the IRS was not targeting groups based on their political views.

“There’s absolutely no targeting. This is the kind of back and forth that happens to people” who apply for tax-exempt status, Shulman told a House Ways and Means subcommittee.

Shulman was appointed by President George W. Bush. His 6-year term ended in November. President Barack Obama has yet to nominate a successor. The agency is now being run by acting Commissioner Steven Miller.

“The Ways and Means Committee has persistently pushed the IRS to explain why it appeared to be unfairly targeting some political groups over others — a charge they repeatedly denied,” said Rep. Charles Boustany, R-La., chairman of the Ways and Means oversight subcommittee.

“The IRS’s ‘too little too late’ response is unacceptable, and I will continue to work to ensure there are protections in place so no American, regardless of political affiliation, has their right to free speech threatened by the IRS,” Boustany said.

Tea Party groups were livid on Friday.

“I don’t think there’s any question we were unfairly targeted,” said Tom Zawistowski, who until recently was president of the Ohio Liberty Coalition, an alliance of tea party groups in the state.

Zawistowski’s group was among many conservative organizations that battled the IRS over what they saw as its discriminatory treatment of their effort to gain non-profit status. The group first applied for non-profit status in June 2009, and it was finally granted on Dec. 7, 2012, he said — one month after Election Day.

During the 2012 election, many tea party groups applied for tax-exempt status under section 501 (c) (4) of the federal tax code, which grants tax-exempt status to social welfare groups. Unlike other charitable groups, these organizations are allowed to participate in political activities but their primary activity must be social welfare.

That determination is up to the IRS.

Lerner said the number of groups filing for this tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in an office in Cincinnati.

Lerner said this was done to develop expertise among staffers and consistency in their reviews. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn’t the group’s primary activity, Lerner said.

As part of this process, agents in Cincinnati came up with a list of things to look for in an application. As part of the list, they included the words, “tea party” and “patriot,” Lerner said.

“It’s the line people that did it without talking to managers,” Lerner. “They’re IRS workers, they’re revenue agents.”

In all, about 300 groups were singled out for additional review, Lerner said. Of those, about a quarter were singled out because they had “tea party” or “patriot” somewhere in their applications.

The IRS statement said that once applications were chosen for review, they all “received the same, even-handed treatment.”

Lerner said 150 of the cases have been closed and no group had its tax-exempt status revoked, though some withdrew their applications.

“Mistakes were made initially, but they were in no way due to any political or partisan rationale,” the IRS said in a statement. “We fixed the situation last year and have made significant progress in moving the centralized cases through our system.”

Marcus S. Owens, who spent a decade leading the IRS division that oversees tax-exempt organizations, said Friday that it made sense that the problem arose among workers in Cincinnati because the agency “really has delegated a lot of authority” to local offices to make decisions about handling their workload.

But Tea Party groups weren’t buying the idea that the decision to target them was solely the responsibility of low-level IRS workers.

“It is suspicious that the activity of these ‘low-level workers’ was unknown to IRS leadership at the time it occurred,” said Jenny Beth Martin, national coordinator for Tea Party Patriots, which describes itself as the nation’s largest tea party organization. “President Obama must also apologize for his administration ignoring repeated complaints by these broad grassroots organizations of harassment by the IRS in 2012, and make concrete and transparent steps today to ensure this never happens again.”

Story Update:

PHOTO: Tea party activists Bob Mason, left and John Oltesvig, both of North Carolina, wear colonial costumes with tri-corner hats as they participate in the rally at the Capitol, April 6, 2012.

The Internal Revenue Service is apologizing for what it acknowledges was “inappropriate” targeting of conservative political groups during the 2012 election to see if they were violating their tax-exempt status.IRS agents singled out dozens of organizations for additional reviews because they included the words “tea party” or “patriot” in their exemption applications, Lois Lerner, who heads the IRS division that oversees tax-exempt groups, said Friday. In some cases, groups were asked for lists of donors, which violates IRS policy in most cases, she said.The agency — led at the time by a Bush administration appointee — blamed low-level employees, saying no high-level officials were aware. But that wasn’t good enough for Republicans in Congress, who are conducting several investigations and asked for more.

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Click below for the full article:

http://abcnews.go.com/Politics/wireStory/irs-apologizes-targeting-conservative-groups-19151151

 

Reuters: Fight expected in House on online sales tax

The Senate voted overwhelmingly on Monday to give states the power to enforce their sales tax laws on online purchases, but the legislation faces a tougher fight in the Republican-controlled House of Representatives.

The Democratic-controlled Senate voted 69 to 27 to back the measure, which pits brick-and-mortar stores like Wal-Mart Stores Inc and cash-hungry state governments against such Web retailers as eBay Inc and Republicans wary of new tax measures.

“Call me a conservative, but I believe the right approach to tax fairness is to reduce rates — not force higher rates onto others,” said Tom Graves, a House Republican from Georgia.

House Speaker John Boehner plans to send the bill to the House Judiciary Committee, a senior Republican aide said. That will mean hearings ahead. The Senate uncharacteristically bypassed this step.

Judiciary Committee Chairman Robert Goodlatte, a Republican, has reservations about the legislation, including its complexity and potential impact on small businesses, a spokeswoman said.

Goodlatte has yet to schedule any hearings on it, she said.

Backers of the measure include major traditional retailers Wal-Mart andBest Buy Co Inc, as well as e-tailing giant Amazon.com Inc, which wants to simplify its U.S. state sales tax payments.

Opponents include many other online merchants such as eBay, Overstock.com Inc and anti-tax activist Grover Norquist. Lawmakers from states without sales taxes – like Montana, Oregon and New Hampshire – largely oppose the measure.

States that charge sales tax have largely been unable to require e-tailers to collect it from purchasers unless the e-tailer had a physical presence in the state. Otherwise, consumers are supposed to pay the tax, but very few do.

Some states have made separate arrangements with Amazon on the issue, while others have not.

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Click below for the full article.

http://www.reuters.com/article/2013/05/07/net-us-usa-tax-internet-idUSBRE9450QZ20130507

Motley Fool: The 5 States With No Sales Tax

All 50 states make different choices about where they’re going to get the tax revenue they need in order to provide the services their residents expect and demand. With income taxes, property taxes, and sales taxes among the revenue-collecting tools at their disposal, most states end up using a combination of all three to make ends meet.

But some states have chosen not to impose any sales tax at the state level, making it a lot cheaper for shoppers to buy. Using a combination of figures from the Tax Foundation, including general state sales taxes and average local-option surtaxes, let’s look at the five states that don’t have statewide sales taxes with an eye toward identifying the impact their decision has on individuals and businesses.

5. Alaska Although Alaska doesn’t have a statewide tax, it does have local option taxes that amount to an average rate of 1.69%. Alaska doesn’t have an income tax, either, relying solely on property taxes for its sole means of support from individuals. The lion’s share of state revenue, however, comes from royalties and oil tax revenue from ExxonMobil (NYSE: XOM ) , ConocoPhillips (NYSE: COP ) , and BP (NYSE: BP) , all of which have extensive operations in the state. Even recent tax cuts on those oil giants hasn’t added to residents’ share of the overall tax burden, and residents also receive checks from the Alaska Permanent Fund amounting to $878 per person in 2012.

4. Montana Like Alaska, Montana also has local-option resort taxes in certain areas of the state, but the Tax Foundation lacked adequate data to measure the average impact of those add-on taxes. Yet many of the most populous areas of the state, including Billings, Bozeman, and Missoula, don’t have any sales taxes at all. Given that state’s remote location, however, having no sales tax doesn’t do much to draw shoppers from neighboring states. Fairly high income taxes offset the lack of sales tax.

3. New Hampshire With the moniker “Live Free or Die,” New Hampshire gives residents a double-tax break, with no sales tax and an income tax that applies only to interest and dividend income. High property taxes make up the difference, but New Hampshire’s proximity to Boston leads to a regular exodus of shoppers across the Massachusetts border to avoid that state’s 6.25% sales tax.

2. Delaware Delaware is a small state, but it plays a vital role in providing a home for most of the nation’s largest corporations. The state’s 8.7% flat corporate income tax rate leads to tax collections that are the seventh highest in the country and help allow Delaware to charge no sales tax. Nearby Philadelphia and Baltimore provide two sources of shoppers seeking tax-free purchases, but shopping malls strategically located on the Interstate 95 corridor do their best to pull in travelers from all over the East Coast.

1. Oregon Of all the sales-tax-free states, Oregon has the closest symbiotic relationship with its neighbor. Washington lies just across the Columbia River from Portland, and the states are near-mirror-images of each other when it comes to taxation, with Washington having a high sales tax but no income tax, while Oregon has a high income tax but no sales tax. As a result, those living in Vancouver, Wash., across the river from Portland, can structure their lives to pay relatively little in income or sales taxes, taking advantage of their proximity to Oregon shopping.

A better way to tax? Many tax advocates believe that sales taxes are the worst way to tax residents, as their consumption focus tends to hit the poor the hardest. By that measure, these five states are most forward-thinking in their tax strategies, although they also clearly believe that they can attract some economic activity by luring shoppers in with tax-free purchase opportunities.

The oil and gas industry has produced plenty of revenue for governments, but it has also brought big profits for investors as well. One promising company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it

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Click below for the full article.

http://www.fool.com/how-to-invest/personal-finance/taxes/2013/05/05/the-5-states-with-no-sales-tax.aspx

AP: Are you a tax cheat if you shop online tax-free?

Buy anything on the Internet lately without paying sales tax? In all but a few states, you’re probably a tax cheat.

That’s right, even if Internet retailers don’t collect sales tax at the time of the purchase, you’re required by law to pay it in 45 states and the District of Columbia.

Here’s the problem for states: hardly anyone pays the tax, and there’s not much states can do about it.

The Senate is expected to pass a bill Monday making it easier for states to collect sales taxes for online purchases. Some of the nation’s largest retailers are rejoicing. But small-business owners who make their living selling products on the Internet worry they will be swamped by new requirements from faraway states.

“It’s a huge burden for a company like ours,” said Sarah Davis, co-owner of Fashionphile.com, a California-based company that sells high-end pre-owned handbags and purses. “We don’t have an accounting department, we’ve got my father-in-law.”

Davis started the company in 1999 and now runs it with her brother-in-law. They have 26 workers and three stores, in Beverly Hills, San Diego and San Francisco. Last year, Fashionphile.com did $10 million in sales, the vast majority of it online, Davis said.

Fashionphile.com sells bags directly from its website and on eBay. The company collects sales taxes from customers who live in California, but not from people who live in other states, Davis said. Under the law, states can only require stores to collect sales taxes if the store has a physical presence in the state.

That means big retailers, such as Wal-Mart, Best Buy and Target, with stores all over the country collect sales taxes when they sell goods over the Internet. But eBay, Amazon and other online retailers don’t have to collect sales taxes, except in states where they have offices or distribution centers.

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Yet another story of MORE TAXES, MORE GOVERNMENT, and MORE HARM to small businesses.  How original!  Click below for the full article.

http://news.yahoo.com/tax-cheat-shop-online-tax-125303228.html

RON PAUL: The Internet Tax Mandate Is Backwards Thinking

ron paul

David French, Senior Vice President of the National Retail Federation, the major  industry group lobbying for the so-called “Marketplace Fairness Act,” (more  aptly named the “National Internet Tax Mandate”) recently commented that “….the  law [governing Internet sales]  today is a 20th-century interpretation of an 18th-century document….”  Mr.  French’s comments are typical of those wishing to expand government power beyond  the limits established by the United States Constitution.

Those of us who insist the federal government remain within  the confines prescribed by the Constitution are used to condescending lectures  about how the Constitution is a “living document” whose principles evolve over  time.  I was even once informed by the then-Chairman of the House Committee  on Foreign  Affairs, who was widely considered one of Congress’ leading constitutional  authorities, that the constitutional requirement for a declaration of war was an  anachronism!

While Mr. French may not go that far, he is arguing that  Congress turn the Commerce Clause on its head by passing the Internet Tax  Mandate.  The Commerce Clause was intended to facilitate free trade by  giving the federal government limited power to ensure state governments did not  impose taxes  and regulations on out-of-state business.  Contrary to modern belief, the  Commerce Clause was not intended to give Congress power to regulate every sector  of the economy.  And the Commerce Clause was certainly not intended to  allow Congress to help state governments collect taxes on purchases from  out-of-state merchants.

The National Internet Tax Mandate overturns the Supreme  Court’s 1992 Quill v. North Dakota decision  that states can only force businesses to collect sales tax if the business has a “physical presence” in the state.   Quill represented a rare instance where the  Supreme Court properly interpreted the Commerce Clause.  Thanks to  the Quill decision, the Internet has  remained a tax-free zone, though some states require consumers to later pay  taxes on products they purchased online.  This freedom has helped turn the  Internet into a thriving and dynamic sector of the economy, to the benefit of  entrepreneurs and consumers.

Now that status is threatened by an alliance of big business  and tax-hungry state governments seeking new powers to force out-of-state  business to collect state sales taxes.  Far from updating the Constitution  to fit the needs of the 21st century, the  National Internet Tax Mandate is a throwback to  18th century mercantilism.

The National Internet Tax Mandate will raise the costs of  doing business over the Internet. Large, established Internet companies, such as Amazon,  can absorb these costs, whereas their smaller competitors cannot.  More  importantly, the Mandate’s increased costs and regulations could prevent the  creation and growth of the next Amazon.

Raising prices on goods purchased over the Internet will also  impose an additional hardship on American consumers, many of whom are already  struggling because of the troubled economy.  And giving ravenous state  governments new authority to tax sales made by out-of-state businesses  practically guarantees future sales tax hikes, as the arguments will be made  that most of the increases will fall on out-of-state businesses.  These  businesses will lack effective ability to oppose the tax increases — a form of  taxation without representation.

Contrary to Mr. French, it is the proponents of the National  Internet Tax Mandate who are embracing outdated principles, such as higher taxes  on prosperity, piling more regulations on already over-burdened workers, and  legislation designed to help entrenched businesses at the expense of their  smaller competitors and consumers.  Opponents of the Internet Tax Mandate  recognize that the principles of limited government and free markets represented  by a true reading of the Commerce Clause provide a timeless guide to economic  growth and prosperity.

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Click below to read the article on Business Insider’s website by Dr. Ron Paul, former Texas Congressmen and current Chairman of the Campaign for Liberty.

http://www.businessinsider.com/ron-paul-internet-tax-mandate-2013-5

Gene Healy: No More Tax Dollars for Presidential Libraries, Let America’s former presidents burnish their legacies on their own dimes.

Last week, at the dedication of the George W. Bush Presidential Library and Museum, President Obama and former Presidents Bill Clinton and Jimmy Carter put partisanship aside and descended on the Southern Methodist University campus in Dallas to say nice things about our 43rd president, (They’re all in the same racket, after all.)

At 226,560 square feet and a cost of $250 million, the Bush Presidential Center is the biggest and most expensive yet of the 13 presidential libraries that one scholar has derisively called “America’s Pyramids.”

One of the key exhibits at the Bush megalith is Decision Points Theater, a virtual Situation Room wherein visitors can “consult” video advisers and make their own calls on some of the “Decider’s” key decisions, like war with Iraq, the response to Hurricane Katrina, and bailing out the banks.

As Bush put it in an interview with CNN’s John King, “hopefully, people will go to the Decision Points Theater and say, ‘Wow, I didn’t understand that’ or ‘I now understand it better.’ ”

In Decision Points Theater, if you decide not to go to war with Iraq, “43” himself comes onscreen to tell you flatly that you’re wrong: “Saddam posed too big a risk to ignore. … The world was made safer by his removal.” Bush is entitled to his own spin on the decisions he made, but he should burnish his legacy on his own dime.

Though the libraries’ construction is privately funded, they’re managed by the National Archives and Records Administration, using federal tax dollars.

Last year, it cost the American taxpayer some $75 million to keep them open.

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Click below for the full article.

http://reason.com/archives/2013/04/30/no-more-tax-dollars-for-presidential-lib

Motley Fool: GM Still Taking Taxpayers for a Ride

Last September when Reuters calculated that General Motors  (NYSE: GM  )  was losing almost $50,000 on every Chevy Volt it sold the carmaker was apoplectic with indignation at the “grossly wrong” numbers being thrown around. Sure they were losing money, every new technological advance does, but as they built more cars and then released Volt 2.0 they would become profitable.

Well, GM has certainly built more Volts over the last six months or so and they’ve even sold a few more, too, but then so has Tesla Motors  (NASDAQ: TSLA  )  and Nissan  (NASDAQOTH: NSANY  ) . In fact Tesla sold more of its all-electric Model S cars in the first quarter of the year than GM did with its Volt, and Nissan turned itself around enough so that its LEAF outsold the Volt in March.

We’ll get the April sales numbers in a day or so to see if any traction has been made as spring has gotten under way, and if GM was able to recover from March sales plunging 35%. One thing hasn’t changed month to month and that is that the Volt is still a money-losing proposition for GM and for the taxpayers who bailed it out.

In a presentation yesterday, CEO Dan Akerson admitted GM is still losing money on every Volt sold and will continue to do so for the foreseeable future. So what’s the solution? Not to admit defeat, that’s for sure, at least certainly not when the taxpayer is still nominally footing the bill for your company. Nope, what you do is double down and say you’re going to make even more of your money-losing cars than you did before and you’re going to make them even cheaper than they are now!

Akerson didn’t say how much GM was losing on each Volt, but he did say that if it ever hoped to make a profit on them the carmaker would need to cut as much as $10,000 from the cost of production. That, however, won’t be happening until the next-gen model is introduced, which won’t be until 2015 or 2016 at the earliest.

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Click below for the full article.

http://www.fool.com/investing/general/2013/05/01/gm-still-taking-taxpayers-for-a-ride.aspx

Yahoo News: PROMISES, PROMISES: Social Security pledge at risk

<p> FILE - In this July 15, 2011, file photo, members of Progressive Change Campaign Committee upset over potential cuts to Medicare, Medicaid and Social Security walk to President Barack Obama's campaign headquarters in Chicago, to deliver 200,000 signatures from people who are refusing to donate or volunteer for his re-election campaign if Obama cuts entitlement programs. As the population gets older, Social Security, Medicare and Medicaid are eating up more and more of the federal budget, squeezing the ability of the government to pay for other programs. Today, the three massive benefit programs account for 44 percent of federal spending. Left unchanged, they will account for more than 60 percent in 25 years, according to the Congressional Budget Office. (AP Photo/David Banks, File)

The issue:

As the population gets older, Social Security, Medicare and Medicaid are eating up more and more of the federal budget, squeezing the ability of the government to pay for other programs. Today, the three massive benefit programs account for 44 percent of federal spending. Left unchanged, they will account for more than 60 percent in 25 years, according to the Congressional Budget Office.

Unless Congress acts, the trust fund that supports Social Security is projected to run out of money in 2033. At that point, the retirement and disability program would collect only enough in payroll taxes to pay about 75 percent of benefits.

Medicare’s hospital insurance fund is in worse shape. It is projected to run out of money in 2024. At that point, it would only be able to pay 87 percent of costs, according to projections by the trustees who oversee Medicare and Social Security.

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The campaign promise:

Obama rarely mentioned Social Security during his 2012 re-election campaign. Four years earlier, he was more forthcoming.

In a 2008 speech to AARP: “John McCain’s campaign has suggested that the best answer for the growing pressures on Social Security might be to cut cost-of-living adjustments or raise the retirement age. Let me be clear: I will not do either.”

On Medicare, Obama told the Democratic convention on Sept. 6, 2012: “Yes, we will reform and strengthen Medicare for the long haul, but we’ll do it by reducing the cost of health care, not by asking seniors to pay thousands of dollars more.”

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The prospects:

Obama has already offered to break part of his 2008 pledge on Social Security. Twice in negotiations with GOP leaders, he agreed to adopt a new measure of inflation that would result in smaller cost-of-living adjustments, or COLAs, for Social Security recipients. Both deals fell apart. But now Obama has put forward the idea in his own proposed federal budget. If adopted, it would gradually trim benefit increases in Social Security, Medicare and other programs while raising taxes.

His proposed changes, once phased in, would mean a cut in Social Security benefits of nearly $1,000 a year for an average 85-year-old, $560 for a 75-year-old and $136 for a 65-year-old.

Obama and Republican leaders in Congress have held off-and-on talks about possible changes to entitlement programs since 2011, as part of their efforts to reduce government borrowing. But a deal remains elusive. Republicans insist any agreement must include deep spending cuts, while Obama says any deal must include more tax revenue. And many Democrats in Congress are protective of the entitlement programs that Obama now is willing to touch.

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Click below for the full article.

http://news.yahoo.com/promises-promises-social-security-pledge-173052710.html