The following is a letter-to-the-editor of the Daily Times, Salisbury, MD. It was written by attorney, Mike Pretl and he has given us permission to post it on Delmarva Progressive. It is an authentic appeal to look at the IRS issue with a fresh face and to realize that when dealing with the IRS, there are no good guys and bad guys, only well-documented applications and questionable ones.
Perhaps I am the last person who should be coming to the defense of the Internal Revenue Service, and its Exempt Organization office in Cincinnati. I have had numerous legal battles – detailed requests for information, and a few arduous audits, initiated by overzealous agents at that office. Nevertheless, I am convinced that the current “scandal” is overblown and purely political in nature. I find it incredible therefore that Administration officials are grumbling excuses and apologies, rather than defending themselves by explaining clearly what that office does every day, and is supposed to do.
In 40 years as a Maryland attorney, I have been pleased to create more than 75 nonprofit, tax-exempt corporations. I have represented nearly all pro bono (without fee). With few exceptions, all of these groups operate at the progressive end of the spectrum – environmental activists, health care reformers (pre-Obamacare), community organizers, juvenile service providers, charter schools, church-affiliated entities, and “friends” of a scout troop and child advocacy center. Exempt status has been sought under various sections of the Internal Revenue Code, chiefly Sections 501(c)(3), (c)(4), and (c)(6). Perhaps half of all the applications were greeted with IRS questions — a “request for further information” – sometimes elementary, and often detailed and onerous. In the past I would tell my clients to expect a determination letter in about 120 days. More recently I have had decisions delayed for months, or for a year or two, always without explanation.
And I repeat, these are virtually all liberal advocacy organizations, and the hassles and delays have occurred during the last seven administrations – four Republican and three Democratic.
In my ongoing role as unpaid counsel to these groups, it is my duty not only to collect data and file IRS applications, but to advise what they can and cannot do to retain their exempt status. Many leaders of (c)(3) charities are surprised to learn that they may lobby the legislature to a limited extent, in support of their goals, but of course cannot engage in elective politics. The (c)(4) (“social welfare”) entities are told that they may support candidates who support their goals, but under the IRS Code, elective politics cannot be their “primary” activity, or a “substantial part” of their daily efforts.
Which brings us back to the current “scandal.” Despite some apparent excesses and unfortunate statements, it appears that the IRS agents have been caught doing just what they are paid to do – enforcing the Code. Following the Supreme Court’s Citizens United decision in 2009, numerous organizations were formed, most of them on the right, and sought (c)(4) status so their contributors need not be disclosed. Many Tea Party chapters and similar groups did not disguise their role as primarily political efforts, however, so the non-political career employees at IRS marked them presumptively ineligible for exempt status. The agents perhaps went overboard in a few cases – but that zeal hardly suggests a conspiracy.
A final personal story: A few years ago, the leading Maryland handgun control advocacy group –which had established separate (c)(3) and (c)(4) entities — was wrongly accused of improper election-year activity. IRS auditors promptly served each entity a series of 82 detailed document requests. The IRS agents were far from friendly, and we spent nearly a year in proving our client not at fault. At the end, however, we explained to our volunteer board of directors that occasional scrutiny, often unpleasant, is the price we must pay, to secure the invaluable benefits of tax-exempt status. Perhaps Congressional investigators will soon get the same message.
Mike Pretl is a semi-retired attorney, residing in Riverton, in Wicomico County.