Category Archives: tax exempt organizations
Churches should not be allowed to advocate for or against candidates
I agree with The Des Moines Register editorial that the law that bans churches from endorsing specific candidates, (the Johnson Amendment), should not be repealed. (See link below.)
Prairie Meadows should open their books, regardless of ruling
On 12/16/2016, The Des Moines Register reported that the Iowa Public Information Board had ruled that Prairie Meadows Race Track and Casino was not a “government body” according to their rules and, therefore, was not required to follow open records laws, and not required to provide the Register with records pertaining contracts of its top executives. (See link below.)
The Register can appeal the decision, and has some good arguments why Prairie Meadow should be subject to open records laws. But even if Prairie Meadows is not required to follow open records laws, they could still release the records voluntarily. Just because it is legal to do something does not mean it is the right thing to do. Prairie Meadows would not exist if not for the original support of Polk County taxpayers. The board claims that Prairie Meadows is a not-for-profit organization, (even though the IRS disagrees). I don’t understand why any board member would want to be anything other than completely transparent about the operations of Prairie Meadows? I presume that none of them feel they have anything to hide.
I appeal to the board members of Prairie Meadows to simply do the right thing, and voluntarily open their records to the public, and the Des Moines Register.
Link to Register article: http://www.desmoinesregister.com/story/news/local/government/2016/12/15/iowa-board-says-prairie-meadows-records-can-secret/95492840/
Not all tax exempt organizations are the same.
The Register still has it wrong. (“Churches cross line with political endorsements”, 4/9/2015 – see link below.) Churches with ministers who advocate for specific candidates should be allowed to be tax exempt. But donors who contribute to them should not get a charitable tax deduction.
There are two types of tax-exempt organizations. First, there are the Charitable, Religious and Educational organizations, (tax code 501c3 organizations), that pay no income taxes, (and often don’t pay other taxes), plus donors get a charitable tax deduction on their income taxes for the amount of their contribution. Second, there are all other tax-exempt organizations that pay no income taxes, (and often don’t pay other taxes), but donors do NOT get a charitable deduction. They are properly classified as tax exempt, since they are organized to not make any kind of profit, but their activities are not charitable, so no charitable tax deduction is given.
There are many tax exempt organizations that do not make any profit, but that are not charitable and whose donors don’t get a tax deduction. They include Rotary clubs, political parties, country clubs, political issue organizations, chambers of commerce, special interest clubs, etc. None of them try to make any profit, but they are not charitable.
To the extent that any not-for-profit organization advocates for or against specific candidates, that organization is not doing charitable work. It is doing political work. Under the principle of equal treatment under the law, donors to churches that advocate for specific candidates should not get a charitable tax deduction. If a church wants its donors to receive a charitable tax deduction for contributions made, then the minister should not advocate for candidates from the pulpit, or through any other communication from the church.
Link to Register editorial: http://www.desmoinesregister.com/story/opinion/editorials/caucus/2015/04/08/rgisters-editorial-churches-cross-line-political-endorsements/25500433/
Convention Center Hotel should be private, for-profit
Today, the Des Moines Register reported that the group charged with bringing a hotel to the Iowa Events Center is suggesting that the hotel be managed by a nonprofit organization. (See link below.) It appears from the report that the hotel would have a separate private owner. I don’t get it. Wouldn’t the owner decide who would manage the hotel? The project has already been scaled back from 450 room to 300 rooms due to project costs. The current proposal is relying on, “a number of city, county and state incentives.” It appear pretty clear that the private sector thinks such a hotel does not make good economic sense. Given the vitality of the downtown Des Moines area, we need to ask when, if ever, are the taxpayer subsidies going to end for what should be private investments.
IRS wrong to delay tax exempt status.
The IRS should quickly and easily approve the income tax exempt status of most political organizations. An organization should pay income taxes only if it actually earns a profit. If people want to pool their money together for any purpose other than to make a profit, the the act of contributing money to the pool should not be taxed. The following are examples of organizations that are properly exempt from income taxes: churches, charities, non-profit educational institutions, private social clubs, political organizations. Exemptions from other types of taxes, such as sales and property taxes, are made at the state level. Just because an organization does not make a profit and is exempt from income taxes should not automatically make it exempt from other types of taxes.