Tax Exempt Status

Like most people, I was originally horrified by the reported targeting of tea party groups ("IRS head forced to go," May 16). I am now less horrified. It is reported that various tea party groups were requesting tax exempt status as a "social welfare" group. We now need to know the definition of a "social welfare" group. Entities operating under the umbrella of the tea party would not appear to qualify. Of course, this tempest in a tea pot does highlight some interesting issues. Do we wish to expand the number of entities claiming tax exempt status or should we limit the number of groups not paying taxes?

The real scandal is why the IRS approved for tax-exempt status organizations that were plainly political and not "social welfare" organizations, as section 501(c)(4) of the Internal Revenue Code requires ("Taxing the tea party," May 14). The GOP's phony outrage obscures the fact that not a single application from the tea party-affiliated organizations for tax exempt status was denied. They probably should have been. Mark Davis, Baltimore

The Internal Revenue Service has revoked the tax-exempt status of four credit counseling groups, and others are facing the same fate as a result of an agency examination launched two years ago, an IRS attorney told an industry association yesterday. The IRS began the audits after rising complaints that some nonprofit credit counseling agencies - including Maryland-based AmeriDebt - abused their tax-exempt status by charging high fees, funneling money to for-profit affiliates and not providing the financial education promised to consumers.

The Internal Revenue Service said yesterday that it has revoked or plans to repeal the tax-exempt status of every one of the 41 credit counselors it has audited, saying the nonprofits were largely motivated by profit and failed to provide adequate counseling to debt-laden consumers. Additionally, IRS Commissioner Mark W. Everson said his agency has "criminal investigations under way" of credit counselors, but he would not comment further on the probes. The 41 credit counselors earned more than 40 percent of the industry's $1 billion in annual revenues, Everson said in a telephone conference yesterday.

IRS took action in '80s against Forbes advisersWASHINGTON -- Two of Steve Forbes' campaign advisers ran a nonprofit group that was stripped of its tax-exempt status after authorities concluded it had not delivered the projects it promised donors.Carter Wrenn and Tom Ellis, who are helping Mr. Forbes' campaign, were co-directors of the Coalition for Freedom Inc. The group raised more than $1 million in the mid-1980s, and had been granted tax-exempt status as a nonprofit educational group.But the Internal Revenue Service concluded that more than half the received donations went to a consulting firm controlled by Mr. Wrenn and Mr. Ellis, according U.S. Tax Court records.

Sen. Barbara A. Mikulski has asked a congressional committee to review the Internal Revenue Service's decision to audit dozens of veterans groups in Maryland and other states.In a letter to Sen. William V. Roth Jr., chairman of the Senate Finance Committee, Ms. Mikulski said she was "outraged" that the IRS has used its "scarce resources" to investigate veterans' groups and that she wants a hearing to air the issue."With all the tax dodgers who willfully break the law, I don't understand why the IRS is investigating these posts," wrote Ms. Mikulski, a Maryland Democrat.

Is the Internal Revenue Service really doing its job when the only organizations subject to delay and refusal of tax exempt status are ones that are opposed to current administration policies? For the IRS there appears to have been a very definite bias, at least at the lower levels ("At hearing, IRS official mum," May 23). The only question that remains is whether this was a decision by the individual employee of the IRS or whether the effort to hinder the granting of tax exempt status originated at the very top, including even the White House.

WASHINGTON -- Congressional leaders, concerned that many nonprofit hospitals are not providing enough charity care to justify their tax-exempt status, say they will set standards for the industry if it does not do so itself. Senate Finance Committee Chairman Charles E. Grassley, an Iowa Republican, is examining nonprofit hospitals with an eye to legislation that would clarify standards for their tax exemptions. House Ways and Means Committee Chairman Bill Thomas, a California Republican, began investigating the financial practices of nonprofit hospitals last year.

I do not oppose the Archdiocese of Baltimore's stand for life ("Church: Clinic signs are unlawful," March 30). I oppose the lying by omission. A lie is still a sin. A place that offers a service needs to be honest about the service being offered. It's called truth in advertising. And as long as the archbishop insists on being politically active, he needs to be a good citizen and give up his tax exempt status. Freedom of speech is a right that needs to be matched by responsibility.

The head of the Maryland Republican Party harshly criticized the Internal Revenue Service's investigation of state veterans groups yesterday, saying the agency's actions amounted to harassment."