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Catholic Answers sues IRS

stanley123

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On April 3, 2009, Catholic Answers filed suit in federal court against the Internal Revenue Service. Apparently, the IRS had imposed fines on CAF because of its anti-abortion stand which related to national politics.  The final decision could have repercussions for this board here also.  I hope that it will not violate any rules if I post a link for further information?
http://www.catholic.com/appeals/IRS_Appeal.asp

 

Alveus Lacuna

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Catholic Answers said:
I wrote in one of my E-letters that 2004 presidential candidate John Kerry shouldn’t be allowed to receive Holy Communion because of his pro-abortion voting record and public advocacy of child-killing.
This seems to be why the IRS proceeded to fine Catholic Answers and why this lawsuit is now underway.
 

Anastasios

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Your link is fine.

At this time this board is not incorporated as a non-profit. In the future we may incorporate if we grow additional features.
 

Anastasios

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I don't know about groups like Catholic Answers, but an actual Church does not have to incorporate to be tax-exempt. You can read on the IRS website what it has to say about Churches and tax exemption.

501c3 is often used for limited liability, but it is not strictly-speaking necessary to "be" tax exempt (Disclaimer: I am not an attorney or tax expert).  That is what I read in the IRS publication on the topic. Let the reader make his own conclusion though.
 

ChristusDominus

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I had the priviliege of meeting Karl Keating, the founder of of Catholic Answers in the mid 1990's. He was a practicing  laywer before founding this organization. I'm sure he'll know what to do; referring to a legal stand point.
 

admiralnick

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From a Tax Professional's Perspective (of which I am) I would like to point out a few things.

1) As Fr. Anastasios said, we are not a non-profit organization.

The IRS cannot come after this board as A) Its not incorporated in any of the 50 states or US territories. B) We do not file IRS form 990 because we do not have standing as a non-profit organization.

2) Catholic Answers Forum aparrently is a registered 501(c)(3) charity which entitles them to give out letters for tax-deduction of donations. As a 501(c)(3) charity they are, among other things, "...absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) a candidate for public office.

3) As a registered 501(c)(3) Catholic Answers Forum is accountable to the IRS for mixing Politics with Religion. This is how the IRS went after a number of churches and revoked their Charity designation for letting a certain candidate speak while not inviting others. The idea is that you can use the church as a political forum if, and only if, you give the same amount of time and exposure to every candidate.

4) If and when this board becomes incorporated as a registered 501(c)(3) charity, there will need to be strict guidelines on what is said related to politics (such as the private forums). Essentially we are safe no matter what happens.

5) Once again, OC.net is not in danger of any action by the IRS or other taxing bodies. I will be more than happy to defend this position in a court of law or before a tax court judge.

This is my opinion as a tax professional and doesn't necessarily represent the opinions of the moderators or owners of this board or its members. It also may not be used to avoid taxes, penalties or interest as laid out by the IRS or other taxing authority in accordance with Circular 230.

-Nick
 

EofK

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admiralnick said:
This is my opinion as a tax professional and doesn't necessarily represent the opinions of the moderators or owners of this board or its members. It also may not be used to avoid taxes, penalties or interest as laid out by the IRS or other taxing authority in accordance with Circular 230.

-Nick
Spoken like a true Tax Professional (TM)!
 

theistgal

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So does that mean they're not really being persecuted?  ???

'Cause they're sure making it sound that way ... and asking for donations based on that theory.
 

admiralnick

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theistgal said:
So does that mean they're not really being persecuted?  ???

'Cause they're sure making it sound that way ... and asking for donations based on that theory.
The way that this process works is as follows:

1) Taxpayer does something that makes IRS unhappy
2) IRS investigates
3) IRS assesses taxes, penalty, and interest on taxpayer
4) Taxpayer pays taxes, penalty, and interest
5) Taxpayer has 2 options:
a) Accept payment and move on
b) Challenge assessment in Federal District Court suing for refund from the Government

Catholic Answers has decided to go to part B when they got to stage 5.

What puzzles me about the whole thing is why they didn't go from 4 to 4.5 Step 4.5 would be to appeal the assessment to the Tax Court. In Tax Court the rules are different and payment is not required before the case is decided. After the decision there is still the possibility of challenging in Federal Court.

So basically they're trying to get their money back.

-Nick

 
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