Redacted History: Tax Privacy and the KKK

By Sam Brunson

Tax Lien by Nick Youngson, CC BY-SA 3.0, Alpha Stock Images, Original image at The Blue Diamond Gallery.

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.

Continue reading “Redacted History: Tax Privacy and the KKK” →

Satan, Tea Parties, and the IRS

By Sam Brunson

Did you hear that the IRS granted a Satanic cult tax-exempt status in ten days?!? Meanwhile, Tea Party groups’ exemption applications languished for months or even years?!?

I know, it sounds pure conspiracy theory: the IRS loves Satan and hates conservatives. But it’s true! Or, at least, kind of! But it needs to be contextualized, because comparing the exemption application of Reason Alliance, Ltd. (the putative Satanic cult) and Tea Party groups is inapposite.[fn1] Continue reading “Satan, Tea Parties, and the IRS” →

More on Hate Groups and Tax Exemptions [Updated]

On the Cooking the Books Podcast, Phil Hackney and I discussed Michael Kunzelman’s story (that we both spoke to him about) on white nationalist groups that are tax exempt. Over at the Volokh Conspiracy, Eugene Volokh asserts that the IRS cannot constitutionally deny tax exemptions to “hate groups” based on their views, abhorrent that they may be.

Since he name-checks me and fellow Surly blogger Phil Hackney, I figured it was worth responding to his piece. (It’s worth noting that we’ve generated a fair amount of Twitter discussion already; you can catch that in a number of threads, including this one and this one.)

I don’t intend to be comprehensive here, but I want to make five main points: Continue reading “More on Hate Groups and Tax Exemptions [Updated]” →