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Posts published in “Day: December 18, 2009”

A false charge

When you have the mix of tax exemption, non-profit organizations and political activity, you're in legally-sensitive territory where the potential for slipping into legal gray areas, or even a serious red zone, is very real. You'd probably need an attorney conversant with this sector of the law to know conclusively whether the Common Interest, the Idaho advocacy group, and its recent head, Keith Allred, now a Democratic candidate for governor, conclusively met all the obligations precisely. It's just a complex field.

But this much, from an e-mail by Jonathan Parker, Idaho Republican executive director, was simpler: "the Idaho Republican Party discovered that Keith Allred and The Common Interest have never filed with the IRS as a non-profit, tax-exempt 501(c)(3) organization despite holding themselves out to be."

A serious legal charge if true - very serious. We're talking about funnin' the IRS here. Jail time has happened for some people who have violated these kinds of laws.

Turns out it's not true.

First, the Common Interest's web site at least (we can't account for all printed materials, but the web site these days is a pretty good mark of an official statement) doesn't say that it is a 501(c)3. Its site says, "We're are currently seeking IRS 501(c)(3) status for this organization. While we're already a non-profit and do not have to pay taxes, donations are not tax deductable until and unless we are designated as a 501(c)(3). (The Common Interest of Idaho, Inc. is the legal entity responsible for advocating positions in the Legislature. It is a 501(c)(4) non-profit. It's work is done excusively by unpaid volunteers.)"

In 2006, it said "Although we are a non-profit, donations are not tax deductable. This is because the federal tax code prohibits deducting donations to non-profits involved in the political process, even to non-partisan organizations like ours." Which seems cautious enough.

But it legitimately could have gone further. Since 2004 the affiliated group Common Interest In Action (both are listed in Idaho Secretary of State corporate files) has had 501c4 nonprofit status. And last February the IRS sent a formal letter of determination (which Common Interest emailed around to reporters this afternoon) saying 501c3 status was granted and Common Interest was officially designated a "public charity."

Apology at the least would seem to be warranted.