IRS Gives 'Death Penalty' to Conservative Critic

When the IRS revokes tax-exempt status of a 501(c)(3) organization, the sanction is considered so severe that tax practitioners refer to it as the “death penalty.”

The IRS recently gave the death penalty to the Patrick Henry Center for Individual Liberty.

As reported at The Blaze, “The IRS said the group forfeited its status by promoting regularly politically charged articles written by Patrick Henry Center founder Gary Aldrich, a former FBI agent.”  Aldrich is a best-selling author, considered a hero or an enemy, depending on one’s view, for exposing Bill Clinton’s escapades.  He’s also a friend to many constitutional conservatives.

The Patrick Henry Center’s criticisms focused a great deal on Hillary Clinton when she was a candidate.  The IRS issued a “report of examination” in 2011 with an explanation of why fundraising letters and Internet postings of the Center necessitated revocation of 501(c)(3) status.

For those who wish to review the manner in which the IRS found the Center’s communications at fault, you may read the redacted final adverse determination issued by the IRS on December 30, 2013.

It was not always that c3s were censored from engaging such speech.  Senator Lyndon Johnson is attributed with adding the provision to the Internal Revenue Code prohibiting 501(c)(3) organizations from engaging in political speech.  Johnson had come under fire by some Texas churches, and decided to punish them with censorship.

In 1983, the Supreme Court upheld this form of censorship when it was challenged in Regan v. Taxation with Representation of Washington.  The Court ruled that tax-exemption is a “subsidy,” and if Congress can grant the subsidy, it has the power to dictate its conditions.  First Amendment be damned, and beware what Congress does for you.

Of note, the IRS Commissioner under Bill Clinton was Peggy Richardson, who is a Friend of Hillary.  Under Richardson, dozens of conservative organizations were audited.  Unlike First Amendment bad-girl Lois Lerner, Richardson left the IRS unscathed for a lucrative career in tax law, investment advising, and sitting on various boards. 

Richardson has, however, been associated with more recent controversy.  She sits on the board of Gulf Coast Management Funds, which funded Virginia Governor Terry McAuliffe’s controversial e-car company GreenTech Automotive.  GreenTech was founded in China, will “enjoy ‘billions’ in government subsidies,” has been suspected of a “visas-for-sale” scheme, but has under-delivered on McAuliffe’s claims of job creation.

So it is that the ruling class makes the rules, skates through consequences, and yet conservative critics of their corrupt ways get censored.