A year and a half ago, I learned that in the 1940s, the IRS revoked the Ku Klux Klan’s tax exemption and sued it for almost $700,000 in back taxes. Two years later, the IRS filed a tax lien against the KKK’s assets. While that may not have been the death blow to the 1920s iteration of the KKK, it was certainly part of the death blow.
I’ve since learned a lot more about the whole story, including how the KKK could claim exemption in the first place. I’ve read dozens of contemporary (and retrospective) newspaper articles about the revocation. Heck, I’ve read through a couple Stetson Kennedy archives. I’m dying to write an article about this piece of history.
There’s only one problem: I don’t know why the KKK lost its exemption.
I’ve been following Gaylor v. Mnuchin, the parsonage allowance case, for years now. A couple months ago, I got to hear oral arguments the second time it went up to the Seventh Circuit. And I’ve been waiting eagerly since for the court to issue its decision.
As of 11:18 pm Central time on January 30, the court had not yet issued its opinion. But, in spite of the case being fully briefed and argued, one update to the case recently occurred: the state of Michigan changed its mind. Continue reading “Michigan and the Parsonage Allowance”→
It’s not even an election year, but the last couple weeks have been exciting for tax policy fans. First was Rep. Alexandria Ocasio-Cortez inserting the idea of a 70% top marginal rate into the public conversation. Then today, Sen. Elizabeth Warren proposed a wealth tax on taxpayers with household wealth in excess of $50 million. While she hasn’t released details, and the news reports aren’t completely clear, I’m assuming that households would pay 2% of their net worth in excess of $50 million, and an additional 1% on their wealth in excess of $1 billion.[fn1]
Like much of America, I watched a Fyre Festival documentary last week. I chose Hulu’s Fyre Fraud over Netflix’s Fyre: The Greatest Party That Never Happened because I only had time for one, and Fire Fraud had an interview with Billy McFarland. (I’ve since heard great things about Netflix’s documentary, too, so I’ll probably watch it eventually.)
About nineteen and a half minutes into the documentary, we’re introduced to Ja Rule; we see him in an interview (with Wendy, apparently), who says to him, “So you spent two years in prison.”
He responds, “Yeah, I went in on my state charge for the gun charge, and they ran it concurrent with my tax stuff.”
As we’re all acutely aware, in his presidential campaign, Donald Trump flouted decades of history by refusing to release his tax returns. And given that (a) the history was based on norms, not law, and (b) the Republican-controlled Congress did nothing to enforce the norms (or transform them into law), he continued to flout that norm throughout the first two years of his presidency.
What does that first sentence mean? Broken down roughly: the tax law requires most entities exempt under section 501 to file an annual information return. That information return—currently Form 990—is filed with the IRS, but must also be made available to the public. It allows both the IRS and the general public a window into the financial workings of tax-exempt organizations, and provides a basis for administrative and public oversight of tax-exempt organizations. (For purposes of this lawsuit, it’s also worth noting that if a tax-exempt organization that is required to file a Form 990 doesn’t for three consecutive years, it automatically loses its exemption.)
Section 6033(a)(3)(A) provides a mandatory exception to the filing requirement, though. Under the Code, churches, their integrated auxiliaries, and conventions of churches don’t have to file a Form 990. While the IRS can still get access to them through an audit (though note that the steps the IRS must take to audit a church are really stringent), the general public has no way to see financial information about a U.S. church unless the church voluntarily discloses that information (which some do). Continue reading “NonBelief Relief and Form 990”→
A week from Wednesday, the Seventh Circuit will hear oral arguments in Gaylor v. Mnuchin, the case in which the Freedom From Religion Foundation is challenging the constitutionality of the parsonage allowance.[fn1]
In anticipation of the oral arguments, Professor Anthony Kreis and I are hosting a preview of the case this Wednesday, October 17, at noon. It will be in room 105 of the Corboy Law Center, 25 E. Pearson St., Chicago, IL 60611. There will be pizza, soda, and some great discussion. If you’re free for that hour (and, of course, in or near Chicago), I’d love to see you there! RSVP here. Continue reading “Seventh Circuit Preview: Gaylor v. Mnuchin”→
I grew up in the north suburbs of San Diego and, while I haven’t lived in Southern California in a couple decades now, I try to keep a vestigial self-identification as a Southern Californian.[fn1] Part of that self-identification is listening to the Voice of San Diego podcast; it keeps me vaguely up-to-date on current politics in San Diego.