In May on 2009 the Waco Tea Party incorporated in order to be able to raise funds and pay operating expenses. We consulted an attorney and a Certified Public Accountant, both gave us options of how to incorporate and what kind of entity to become for legal and tax purposes. We ultimately chose to apply to for 501(c)(4) status, and it gave us time to work on the requirements. At that time it was prior to the Citizens United case so the rules were a bit different. After the Supreme Court ruled in favor of Citizens United we expected the Internal Revenue Service and the Federal Elections Commission would have to change the rules. Therefore, we expected to be required to submit more information, and we expected it to take approximately 9 - 12 months based on what the IRS and our accountant told us at the time. We also fully expected that our board members and/or our organization could be audited or go through an arduous process. We still felt is was worthwhile to to apply for the non-profit tax exempt status.
In July 2010, our Treasurer, Carol Waddell, filed the necessary paperwork to apply for a 501(c)(4) status with the IRS. We sent the necessary paperwork and the fee of $850 to them and filed the 990 form. A few months later we received a letter that stated that the IRS had received the application, and that the Waco Tea Party would be sent a follow-up letter that would state whether we had been approved or denied, or if additional information was required. We followed-up with the IRS about once per quarter to find out the status. Each time, we were told approval of our status was "pending." So, Carol has faithfully filed form 990 each year, as instructed by the IRS.
On Tuesday, February 7, 2012, Carol went to retrieve our mail from our post office box and discovered a letter from the IRS concerning our status. The letter (see attached) requested more information to be submitted in order for our 501(c)(4) status to be approved. Some of the information the IRS is requesting is reasonable. For example, they need a date-stamped copy of our incorporation papers (when scanned the date stamp doesn't show up well) and other business related documents. That is perfectly understandable and not unreasonable. In fact, many of the questions the IRS asked are reasonable and expected, and we would have no issue with submitting our answers and complying with their request by the due date of February 28, 2012. In addition, some of the questions do not apply to our organization because we do not support or endorse candidates or slates of candidates.
However, there are the other questions that are either next to impossible to answer because of the wording, or so onerous that it would be financially impossible to comply with them (like requesting transcripts of our radio shows for 2 + years). Given the vast amount of information requested, it would take us months to gather, print, transcribe, and fax (or mail) all the data. For example: We have over 2000 posts on our Twitter account, and we would have to screen-shot all those posts, copy each of them into a document, and then print all those documents. It would take literally days to do that, and it would require a ream of paper. Then there all the pages we use to communicate via Facebook, YouTube, Linked In, and other social media sites, which would all have to be sent to the IRS in the same manner.
The IRS is asking for information in regards to what we might do in 2012. As you all know, when we have events, we usually are reacting to what is going on politically, and many of our events are not planned that far in advance. Asking us to give dates of events in regarding the elections is impossible, as we don't even know when our primary is going to be held! We do not know in advance who is going to win an election, and we do not know if there will be run-offs. We will most likely plan or participate in get-out-the-vote efforts, but again, we do not know with any certainty when the primary elections are going to be held, making it impossible to comply with this request. We do not know if Congress is going to take up a piece of legislation that might involve the planning of a rally at our Representative's office. Therefore, we can't say what we might do without knowing what Congress might do. We have no way of predicting the future.
Then there are the questions that are vague. When we contacted the IRS agent assigned to our case, he told us that their meaning was "subjective" and to submit what we could, and the IRS would review it. We don't know exactly what to submit for them to use their "subjective" powers to determine if we are in compliance or not, subjective is difficult to comply or know the rule.
Additionally, there is the issue of submitting all news articles written about the Waco Tea Party. Have you ever Googled our name? There are literally hundreds of articles in seven countries, some in the form of an interview, while in others, there was no actual contact with any reporter. Finding, printing, and mailing all those articles is going to take months and, once again, a whole lot of paper.
Further, there is the issue of sending them a copy of all our flyers, newsletters, communications, etc... that we have sent out during 2010 and 2011. There are hundreds of them, and each one has to be printed, which would take (you guessed it) more paper.
There are many questions involving candidates. When we asked the IRS to explain to us when a person is actually considered a candidate they again told us it was "subjective." Well, the question of when someone becomes a candidate should have a clear-cut answer, and one would think the IRS could supply that answer. We would define someone as a candidate as soon as they declare or file; however, are incumbents candidates before they declare? And many elected officials never stop campaigning, so are they perpetually a candidate until they retire from office? When we hold Congressional updates with members of the House or Senate, are they considered to be candidates or elected officials, or both? Not knowing makes it more difficult to comply, or we could fail to disclose something because we didn't think a person was a candidate, yet the IRS might.
And there is more - lots more! We have attached the letter so that you can see the requests and gain a better understanding of what we are attempting to deal with at this time.
If we were to comply with all the requests, we would need a FED EX truck or two just to get it to their offices! If we were to comply, the costs would be in the thousands of dollars just for the paper, printing, copying, shipping supplies, and postage. If we were to comply, the attorney fees and accounting fees would be astronomical, and in the end, there still would be no guarantee that we would be granted the 501(c)(4) status. Other organizations complied, sent all the information, and were still denied.
The day after we received the letter we contacted two national organizations and asked if they had any knowledge of other groups being requested to file this type of information. Their answer was that three or four groups had indeed been contacted in this manner. Then, as we made further inquires, we found more and more groups that had been sent similar requests in the past 30 days - many of which have chosen to go public with these requests from the IRS. Each day more groups are receiving letters. All of the groups have very similar requests, although slightly different (see links to the news stories in the first paragraph, there are copies of other groups IRS requests).
Now, we do not have any proof that the actions of the IRS are politically motivated, and we are told that the IRS would not target tea party or other conservative-leaning groups. (Laughing yet?) However, we do find it odd that the IRS would wait until now to process all of these applications. We find it odd that they only give us two weeks to comply, and when we asked for a extension due to the massive amount of work we would be required to conduct, we were only granted an additional two weeks.
We have a few options which we are exploring, and we are speaking with attorneys, accountants, and experts in this area. We are also talking to other groups and organizations so we can share information and find out what they are doing to move forward. We have asked elected officials to assist in getting some clarification on certain issues and questions. After we learn more we will be making a decision, and once we have the solution and a plan to move forward, we will send you the information regarding that decision.
We will not just give up and just walk away - we're here for the long haul. We have no doubt that you will stay and fight with us!
Toby Marie, Carol, & Becky