Posted by AzBlueMeanie:
It turns out that the conservative Tea Party and Patriot organizations who applied for 501(c)(4) tax exempt status did so because they were concerned that their activities violated the tax exempt status. They knew that their political activities skirted the legalities for a tax exempt status, so they sought the IRS "seal of approval" (the real IRS scandal).
You see, you do not have to apply for a 501(c)(4) tax exempt status. Steven Benen explains, How to apply (or not) for tax-exempt status:
Noam Scheiber raised an interesting point I hadn't seen elsewhere.
It turns out that the applications the conservative groups submitted to the IRS -- the ones the agency subsequently combed over, provoking nonstop howling -- were unnecessary. The IRS doesn't require so-called 501c4 organizations to apply for tax-exempt status. If anyone wants to start a social welfare group, they can just do it, then submit the corresponding tax return (form 990) at the end of the year. To be sure, the IRS certainly allows groups to apply for tax-exempt status if they want to make their status official. But the application is completely voluntary, making it a strange basis for an alleged witch hunt.
So why would so many Tea Party groups subject themselves to a lengthy and needless application process? Mostly it had to do with anxiety -- the fear that they could run afoul of the law once they started raising and spending money. "Our business experience was that we had to pay taxes once there was money coming through here," says Tom Zawistowski, the recent president of the Ohio Liberty Coalition, which tangled with the IRS over its tax status. "We felt we were under a microscope. ... We were on pins and needles at all times." In other words, the groups submitted their applications because they perceived themselves to be persecuted, not because they actually were.