Is the IRS Helping HSUS Keep It’s Non-Profit Status?

By Amy Fernandez

For years, we’ve heard rumors of imminent investigations regarding the questionable 501(c)3 status that HSUS enjoys. Anyone involved in dog club administration is familiar with its benefits – and the regulations that accompany non-profit tax designation. Among other things, 501(c)3 charities must not use resources to influence legislation or political campaigns. That’s a clear violation the Internal Revenue Code – and precisely describes most HSUS activity.

Lately, HSUS has been patting itself on the back about its triumphant role in NBC’s lurid AKC profile. That party’s over.

Multiple investigations are currently underway to document a troubling pattern of bias at the IRS. So far, it’s clear that the Exempt Organizations Division, headed by Washington-based official Lois Lerner, routinely granted non-profit status to some groups while delaying or denying applications from others. This came to light April 24 via the Treasury Department’s investigation. It’s far from the first inquiry prompted by questionable IRS procedures.

You may recall that Missouri Rep. Blaine Luetkemeyer contacted Lerner in May, 2010 presenting substantial documentation regarding possible tax code violations by HSUS. Despite repeated requests, Luetkemeyer never got a response about this. It seems that this wasn’t the only request unheeded by that branch of IRS. Ongoing complaints from various political groups prompted multiple investigations in recent years.

A May 2012 Treasury audit uncovered significant problems in the review process. Prior to that, a June, 2011 internal investigation confirmed that IRS employees routinely red-flagged applications from certain groups seeking tax-exempt status. Those fitting specific criteria were treated to excessive scrutiny, pointless delays, and harassment.

Officials in the loop way back then included Lerner. Now the central player in this scandal, she attempted to diffuse this train wreck by offering a public apology of sorts before the inspector general’s report was released May 10. Her remarks in response to a planted question at an American Bar Association event conceded awareness of her agency’s inappropriate activities.

IRS has a history of stonewalling Congressional requests for information about nonprofits. They often cite confidentiality issues, claiming that charities must protect donor lists. But they may be covering up lots more. Subsequent examination of Lerner’s activities revealed, among other things, her affiliation with HSUS.

It may take a while to determine exactly who knew what when. But investigations are speeding up. The House Oversight and Reform Committee has held three hearings since the story broke. Committee members contend that Lerner provided false or misleading information on this matter four times last year, and they are demanding answers. She was subpoenaed to testify Wednesday. After denying any wrongdoing, she took the Fifth, invoking her constitutional right against self-incrimination

That won’t cut it at this point. Like her strange May 10 apology, her silence only heightens suspicions about her role in the matter. Treasury inspector general J. Russell George added fuel to the fire noting that political orientation wasn’t the only profiling criteria used by the IRS. He didn’t elaborate, but suggested that the investigation could expand to possible criminal activity.

So far, it’s focused on IRS treatment of relatively small players in the non-profit game, the proverbial tip of the iceberg. It also appears that several powerful, politically active non-profits have been getting a free pass from the IRS. Congressman Blaine Leutkemeyer publicly noted Lerner’s possible personal motivation to roadblock investigations of HSUS.

Unfortunately, lobbying and political donations have become inseparable from the democratic system. Here in New York we’re in the midst of local election battles and HSUS is all over it. On May 6, the city with a million genuine problems actually devoted time to a mayoral forum on animal rights. Discussions quickly derailed from city funding for animal shelters into debates about carriage horse bans, pet shops, and vegetarian rights. Five candidates showed up for this fringe event with no clear agenda. Can you guess why$

At this point, IRS must own up to improper targeting but there’s plenty of spin going on. Upper management calls the mess unfortunate errors by overworked staffers with overwhelming workloads and ambiguous tax regulations. The exempt organizations division processes about 70,000 applications annually and supervises 400,000 non-profits.

That doesn’t excuse their actions. Tax code details change frequently, but basic regulations do not. Rules are rules and IRS is the enforcer. Misinterpreting rules and making mistakes on your tax return can equal a vacation in the big house. As of May 23, Lerner is on administrative leave. She may be compelled to testify and wasted no time securing a legal bulldog with expertise handling cases involving intense media scrutiny.

Middle management ineptitude or criminal misdeeds? Lerner’s evasiveness set a tone that may lead to the appointment of a special prosecutor before this gets settled. Stay tuned.

Short URL: http://caninechronicle.com/?p=22922

Posted by admin on May 24 2013. Filed under Featured, World News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.