Tea Party Tax Returns Show 'Rare' Political Activity, 'Small Budgets'

An Associated Press review of public tax filings by 93 Tea Party activist groups show “small budgets” and that groups “rarely displayed overt partisan activities.”  The AP reviewed 990 tax returns through Guidestar and Foundation Center websites and some groups voluntarily made their returns available for review.  

Less than one-quarter of the groups reported substantial revenue, with only 21 of the 93 groups reporting donations in excess of $25,000 between 2009 and 2011.  “The $25,000 figure is a threshold for the IRS because an organization’s financial strength and revenue sources are important factors in determining its tax-exempt status.” Groups that do not meet the $25,000 threshold can file a short form tax return.

The median income for all the groups was only $16,700, which included groups with much larger receipts including the Tea Party Patriots with a $20 Million+ revenue in 2012. 

“The big boys who suddenly look like theywon the lottery are the ones who should expect a knock on the door,”said [former top IRS official Marcus S.] Owens, who headed the IRS’ oversight of tax exempt groups in the1990s. He added: “The agency should have applied better filters thanlooking for every tea party group under the rug.”

Reported expenses were low for most groups, “The contrast between many of the low-budget tea party groups and the few with big bank accounts was most striking in their spending.”

The Faulkner County Tea Party of Conway, Ark., which earned $7,847 in 2010, listed $570 for senior citizen transportation and $873 for a website and communications. The First Coast Tea Party Inc. of Jacksonville, Fla., noted $14 for cookbook expenses and $101 for Christmas ornaments. The Laurens County Tea Party of Laurens, S.C., which took in $2,400 in income in 2010 and is seeking tax-exempt status, listed $204 for buying T-shirts for members.

Katherine Engelbrecht of the Houston-based King Street Patriots has been waiting almost three years for a decision on their tax-exempt status. Engelbrecht reports visits from other government agencies, in addition to the IRS hold up. 

Engelbrecht said the couple has been contacted in recent months by the FBI’s domestic terrorism unit, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and the Occupational Safety and Health Administration. Her patriots group is well-financed, listing $140,000 in revenue and $130,000 in expenses in its 2010 tax filings. True the Vote listed $64,000 in income and $38,000 in expenses the same year. The 2010 filings were the only recent returns that are publicly available.

(I’m not sure $140,000 can be described as “well-financed.” ACORN received $40M in FEDERAL funding alone.)

Tax law experts say “A few groups built million-dollar operations and political ties that could have been legitimate grounds for IRS investigation.