IRS and Non-Profits

The Tax Prof is reporting on an interesting decision by the IRS governing, "political non-profits." The decision involved one group that trained democratic women candidates-and the IRS revoked the group's not for profit status: "The IRS decision released last month involved a so-called campaign school in which a partisan group trained candidates. [The nonprofit is Emerge America, which works in ten states to train Democratic women candidates.]"

What struck us, however, was the following comment from the tax agency (our emphasis): “You are not operated primarily to promote social welfare because your activities are conducted primarily for the benefit of a political party and a private group of individuals, rather than the community as a whole,” said the IRS letter telling the group it was losing its exempt status. [The ruling is Priv. Ltr. Rul. 2012-21-028 (Mar. 2, 2012).]

Which brings us directly to the IRS issue about the Claire Shulman-led LDC-a group that falsely answered the IRS question on whether or not it was engaged in lobbying. Aside from the fact that this is, we believe, unquestionably the filing of a false instrument, it is also quite clear that the LDC's activities "are conducted primarily for the benefit of...a private group of individuals..."

Folks this is reminiscent of the old saying that charity begins at home-and home in this instance is the abodes of Sterling Equities and TDC Development. Charitably, the Shulman LDC is no charity-and the use of this fraudulent device to obtain millions of dollars from the tax payers needs to be exposed and prosecuted.