The US Tax Code: A Tool to Illegally Sidestep Constraints of the Constitution
This morning, I was asked by one of our state coordinators about the legal status of the TAC – why are we organized as a for-profit business rather than a 501c3 or c4 non-profit?
Here’s the bulk of my response:
This is more of a philosophical issue for us than a functional one. Our goal is to be different than all other political advocacy groups – as there are seriously few that operate on a for-profit basis. Why? Partnering with government to receive benefits that are constitutionally-dubious at best is not something we stand for. Also, those same benefits come with many strings attached as campaign finance laws, and the recently proposed “disclose” act make far too clear.
Bottom line? We accept no federal bribe money from the IRS.
The result? It costs us more in tax money, but far less in accounting and paperwork. At this point, we tend to be ahead of the game financially-speaking, but it may not always be that way. What we do have is this: more freedom.
And, as the saying goes – freedom ain’t free.
I’d like to develop this line of thought further and make it an official part of our “About Us” pages. What’s your thoughts on the subject?
NEXT STEPS
Michael Boldin
Michael Boldin [send him email] is the founder of the Tenth Amendment Center.He was raised in Milwaukee, WI, and currently resides in Los Angeles, CA.Follow him on twitter - @michaelboldin, on LinkedIn, and on Facebook.
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The reality is that the world runs on money. To structure a business to be financially stable is no crime, even if the government thinks so. Luckily, I don't worry about what the government thinks about me or my business. Do what is necessary to move forward and continue spreading the message. Semper fi!
Mike, 501c3 is a gag order and we should not submit to it.
We should however find a way to have the same or superior level of transparency and accountability as non-profits operate under. If we do this pro-actively, not having a not-for-profit designation will not harm us. If we neglect the transparency and accountability we will waste precious time fighting imaginary or real fire fights over how was the money used? Was it used appropriately etc?
If only all NFP's truly operated with full accountability and transparency! Unfortunately the facts are the there is a very large and corrupt underbelly to many of our nation's most prominent NFPs.
Part 3 of 3: Last but not least, I will never endorse applying for or accepting any federal, state, local government funding for any reason ever. As a business owner operating as a sole propriotor, I am taxed nearly out of business. I would like to visit with someone that has establised a local or state level organization and is successfully engaged in the war we fight.
Part 2 of 3: So, our choice as chapters or tea party groups or astroturf or whatever other lable the local and state level organizations go under, we must subscirbe to the system to some level or another.
Unless one is going to have the group get into direct candidate advocacy, I see no use in a 527, c3 or other PAC desiganations like earlier stated comes into that political reporting requirements.
Issue advocacy is where we live. So, to provide a level of corporate immunity to those that are in lead positions and to be registered to do business in the state, I (swallow) to a point endorse a 501(c)(4) status. Non tax deductable like a C3, and very simple accounting requirements when working on limited budgets. I have a rule of thumb, that if over 10K in annual revenue, then a C4 is not the way to go. If more, the requirements increase with corporate law and government control.
Part 1: Coming in as the devils advocate here, I offer the following. Here in Montana, we are not able to engage in direct candidate advocacy no matter what status we enjoy. With that, we cannot engage in the judicial branch of our government without standing in the state of Montana. We cannot engage in fundraising activities as a group. We can only indirectly engage in our legislature as a group. To obtain the ability to operate here in Montana, we need to have the for profit status as the national does. ,To get beyond these pesky roadblocks, we need to be registered to do business in the State. To do that we need to have a FEIN and with that we are under the rules of IRS again regardless of what status we are working under.
Michael, I gotta agree with the majority. Live free or die tryin. Becoming a pawn of the Feds is simply several very small steps (such as the one in question) further, and once you take one step the next one gets that much easier Better for us to stay pure, unsubsidized, and unrestricted..
Yes! Please brag about this fact! It is one of the many reasons I've been so impressed with the Tenth Amendment Center!
Another agreement from me on this issue! Enjoying the comments, it is filling some answers for me.
Questions: How does the for Profit work on our local and state levels? Do we keep good records just in case we are questioned or audited (I know the more we get known the federal dogs will start sniffing us out)? Or do we have to declare on our individual tax returns showing profit and loss? (so glad I took courses in business management)
Excited to see our primary results tonight. Florida has a good listing of signers.
Have a good day everyone! 🙂
Bonita
Since all donations are sent through national – there’s no paperwork or documentation needed on the local chapter level. Shoot me an email if you have more detailed questions!
So from what I am reading here it serves little purpose other than for fund raising to go the 501c3 route. As long as financial necessities can be met as a private for profit entity there would seem to be no reason to choose the alternative. We are having this same discussion within our local Tea Party currently. I would suggest reading "The Starfish and the Spider, The Unstoppable Power of Leaderless Organizations" as it has some great insights on this topic.
As a for profit entity, are we allowed to post articles in favor of candidates that favor State Sovereignty and Nullification?/
Thanks, Leon!
Yes. Absolutely. Keep in mind, though, as a matter of principle the TAC does not officially endorse candidates. But, we DO highlight those candidates, individuals and organizations who are doing and saying things in support of our message – the Constitution. You as an individual, are able to support candidates you want to, and as MN-chapter coordinator, you could make your personal views public on your chapter website.
The goal is limited government, less government spending and maintaining/restoring our liberties that the government has taken away. I don't think that could be accomplished by accepting more government rules and control of the movement.
Good call Chuck. Going nonprofit would be like saying we need to follow the constitution but at the same time saying we should just fix social security instead of finding ways to get rid of it.
Remember, the moment you subscribe to the governments rules, regulations and conditions, you are no longer completely free to function as independently as you wish. Better to stay an independent for profit, making little profit to reduce your tax liability than to become a ward of the state. Keep in mind the "Campaign Finance Reform Act of 2002" and its chilling effect on free campaign speech.
Right. At this stage of the game, we can pretty much do whatever we want, since we don’t accept their tax status. We appreciate your feedback!
for profit! capitalism works!
You are correct. Filing as a 501 3 is kowtowing to an illicit system.
Agreed. We get told pretty regularly that we will never find the BIG donors unless we can offer them tax exempt status for their donation. I still believe we need to hold our principles dear even if that is the case…
Great topic Michael,__I was one of the people angling for the tax status, but your response here makes more sense to me now then it did when we had the discussion a few months ago.____Since you guys have been running this a few years, you would be in a position to know how much we pay out of our donations in tax dollars, and know if that is better then jumping through hoops.____What ever system is used, what I would find very useful, would be seeing the by laws for the group, and what we can and cannot do in regaurds of affecting change in policies at the state level.____I have been out of commision for much of the summer out politicing, but I think we will have a much better General Assembly after the November elections. I do not base this on party affiliations, but I know who will be in charge if the Rs become the majority in the Senate, and that is very good for tenthers in my state.____Looking forward to a better year =)__Geoff in Colorado