Primary versus Exclusive

IRS building on Constitution Avenue in Washing...

IRS building on Constitution Avenue in Washington, D.C.. (Photo credit: Wikipedia)

Trust the former budget guy Lawrence O’Donnell to find this.  The part of the tax code with the definition of 503(c)4 was written in 1954 and the IRS regulation adopted in 1959.  (Think maybe we need to update the tax code?).  According to Clare Kim writing for O’Donnell’s “The Last Word”

Internal Revenue Service agents have been struggling to do their jobs–which have been made essentially impossible by an incorrect interpretation of the law that the IRS made in 1959. It was then that the IRS changed the language of the law without any authority to do so. Here is how the tax law was written in its latest update in 1954 on 501(c)(4) social welfare organizations. The 501(c)(4) designation was to apply only to: “Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.”

But a 1959 interpretation guideline written by the IRS says that: ”To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare…”

My Webster’s New Collegiate Dictionary defines exclusive as excluding or having the power to exclude, the definition we are all familiar with.  Exclude is to shut out or bar from participation, consideration or inclusion.  The 1954 tax code meant that any group receiving this exemption was to only promote social welfare.  Primarily on the other hand means chief.  The question some Senators and Representatives put to IRS officials was whether exclusive and primary meant the same thing.  The IRS officials didn’t think so and neither do I.  The 1959 reg combines the two in a way that the poor folks trying to make determinations have to find confusing.

But is this all just semantics?

At his news conference, President Obama stressed the importance of enforcing clear laws. “We’re gonna have to make sure that the laws are clear so that we can have confidence that they are enforced in a fair and impartial way and there’s not too much ambiguity surrounding these laws.”

Citizens for Responsibility and Ethics in Washington (CREW) officially filed a lawsuit against the IRS for departing from statute on “exclusively” for social welfare in the code. The organization’s 17-page filing asks the IRS to simply enforce the law as written and to drop the IRS’ false interpretation of the law.

If this happens the Democratic organizations like Organizing for America will lose their exemptions just like Tea Party groups and Karl Rove.  I don’t think this a bad thing.

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