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Date: 25.10.2017

The Broken Chain (1913)

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Says "Having organizations parading as being social welfare organizations and then being involved in the political combat harkens back to why the statute a hundred years ago said that they were prohibited.

Ways and Means hearing Did Revenue Act prohibit political organizations from claiming tax exempt status? By Janie Har on Thursday, June 13th, at 4: We offer the relevant portion it in its entirety.

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But I think having organizations parading as being social welfare organizations and then being involved in the political combat harkens back to why the statute a hundred years ago said that they were prohibited and why I wholeheartedly agree with my colleague, Mr.

Doggett, saying that we ought to stop this regulation interpretation from that invites people to raise vast sums of money and keep it secret and to engage in political activity -- and some of it, I think, not necessarily promoting the social welfare of our country.

Was there a tax statute years ago that specifically prohibited political groups from claiming tax exempt status under a social welfare provision? We checked with the Internal Revenue Service, thinking this was a pretty straightforward question.

Alas, the spokesman was of no help. The language of the act can be researched," wrote Richard Panick, in an email to PolitiFact Oregon. So away we went.

We learned that in , President Lincoln approved a revenue-raising measure to help pay for Civil War expenses, creating the office of the Commissioner of Internal Revenue. In , states ratified the Sixteenth Amendment of the U.

Constitution, giving Congress the ability to levy and collect income taxes.

The Revenue Act of , also called the Underwood Tariff Act , established what we consider the modern income tax system. Much of it dealt with lowering tariffs on goods. And the Form was born. The language of Section II, G a states that the tax shall not apply to: Groups dedicated to civic benevolence did not have to pay federal tax, so long as private individuals did not profit.

There is little explanation for why this exemption existed. Patrick Malone, spokesman for Rep. Blumenauer, said that the Act placed a prohibition on political organizations by not including such activity as being eligible for exemption as social welfare. But is not including the same as prohibiting? We turned to Richard Schmalbeck, a law professor at Duke University and an expert on nonprofit tax issues.

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We went back to Malone. He said two things signal to him that political groups are prohibited. One, Congress meant the list to be inclusive, because they were so detailed in the organizations included. Two, had Congress meant to include other unlisted activities, they could have used the phrase "include, but are not limited to. Political groups and parties can claim tax-exempt status under the section of the tax code. Since , parties and political organizations have had to register as such, and disclose donors, Schmalbeck said.

Of course, there are political groups on both the right and the left that probably should be categorized as a but claim c 4 status. However, we have two professors who say the law is silent on political activity -- even if one of them sees an implicit prohibition -- and a plain reading of the law that states no explicit ban.

Blumenauer said that "the statute a hundred years ago said that they were prohibited. The Act was silent on political activity, for whatever reasons. We rate his statement False.