After 15 months of delay, the Internal Revenue Service February 16, 2012 gave the Maui TEA Party 21 days to answer 29 questions allegedly intended to determine whether the group is qualified for 501c4 non-profit status. Among the questions sent from the National IRS office in Cincinnati was this item referencing Dylan Nonaka, a local political consultant and former Hawaii Republican Party Executive Director:
"Provide details regarding your relationship with Dylan Nonaka. Provide copies of the training material used by Dylan Nonaka."
It is not clear how a National IRS office knew to ask about a local political figure such as Nonaka. Other questions include demands for the 'resume' of Maui TEA Party board members and information about their families. 501c4 groups are able to publish voter guides and hold candidate forums. The IRS asks 20 different questions about TEA Party work with political candidates, including demands to know the "political affiliation" of any candidates contacted by the TEA Party.
Taken together it is clear that the questions were part of a fishing expedition to gather information about TEA Party activists and other conservative political activists. The questions could easily be construed as interference in the electoral process. Question 26 challenges TEA Party participation in voter registration drives. Protest is fully within the purview of a 501c4, but questions 29a reads: "What percentage of your time and funds are spent protesting?"
The Maui TEA Party immediately went public with the IRS harassment and got help from the American Center for Law and Justice. The IRS backed down and by July, 2012 had granted their request for 501c4 status.
Here is a pdf of the IRS letter to the Maui TEA Party (LINK) and below are the questions:
1) You are a membership organization. Provide details regarding all dues and benefits.
2) Provide actual financial information for 2009, 2010 and 2011. Include details regarding each item listed.
3) Provide copies of your monthly newsletters since October of 2010.
4) You will sell merchandise. Provide a list of all merchandise you will sell, your cost and the sale price.
5) Provide details regarding your relationship with the Leadership Institute. Provide copies of their training material.
6) Provide details regarding your relationship with Dylan Nonaka. Provide copies of the training material used by Dylan Nonaka.
7) Provide details regarding all other training you have received. Provide copies of the training material.
8) Have you added or replaced any board members, officers or key employees since October of 2010? If yes, submit the following information:
a) Provide a resume for each.
b) Indicate the number of hours per month each individual has provided or is providing services to you.
c) Provide a description of all the services each individual provides or has provided to you.
d) Indicate the total compensation provided to each individual.
e) Indicate if any of your current and former officers, directors, and key employees are related to each other (include family and business relationships) and describe the nature of the relationship.
9) List each past or present board member, officer, key employee and members of their families who:
a) Has served on the board of another organization.
b) Was, is or plans to be a candidate for public office. Indicate the nature of each candidacy.
c) Has previously conducted similar activities for another entity.
d) Has previously submitted an application for tax exempt status.
10) Do you have a conflict of interest policy? If yes, submit a copy.
11) Provide minutes of all board meetings since October of 2010.
12) Regarding your fundraising since October of 2010:
a) Provide copies of all solicitations the organization has made regarding fundraising.
b) Provide copies of all documents related to the organization's fundraising events, including pamphlets, flyers, brochures, webpage solicitations.
c) Provide a listing and details regarding all fundraising expenses.
13) You will teach, inform and train regarding your core principles and values. You will hold meetings and rallies, operate a website, conduct lobbying and other activities. To help us gain a better understanding of your organization, please provide the following estimates:
a) Provide a listing of all of your past activities. Indicate the percentage of your time spent conducting the activity (total of all activities should equal 100%} and the percentage of your funds spent conducting the activity (total of all activities should equal 100%)
b) Provide a listing of all of your planned activities. Indicate the percentage of your time you will spend conducting the activity (total of all activities should equal 100%} and the percentage of your funds you will spend conducting the activity (total of all activities should equal 100%)
14) Regarding your current and planned employees:
a) How many employees do you have?
b) Indicate the total of full-time, part-time, and seasonal employees?
c) If employees are part-time, when did/do they work?
d) If employees are seasonal, during what season (months) did/do they work?
e) How many employees are/were devoted to each activity of the organization throughout the year?
15) Regarding your current and planned volunteers:
a) How many volunteers do you have?
b) How many volunteers are/were devoted to each activity of the organization throughout the year?
c) How many and what sort of resources are devoted to volunteer activities?
16) You will conduct rallies, educational events, discussion groups or similar events. For each event you have conducted since October of 2010:
a) Indicate the date and location.
b) Describe the nature of the event.
c) Provide copies of all materials distributed with regards to the event.
d) List all event revenue.
e) List all event expenses.
17) Do you publish or distribute materials or conduct other communications that are prepared by or reviewed by another organization? If yes, explain and provide a copy of such materials or communications.
18) Do you or will you rate candidates? If yes, explain.
19) Provide a copy of the questionnaire you ask candidates to complete.
20) Your application indicated you would have press releases and media advertisements (newspaper ads, radio ads, etc...) supporting candidates who support your principles. Provide a list of all candidates you have included in such press releases or advertisements since October of 2010. State the political affiliation of each candidate.
21) Will you publish and/or distribute material other than press releases and media advertisements in favor of any candidate for public office? If yes, explain.
22) You have posted information about candidate rallies, fundraisers and sign waving schedules on your website and facebook. Provide a list of each candidate for which you have posted such information since October of 2010. State the political affiliation of each candidate.
23) Are you associated with any other IRC 501(c)(3), 501(c)(4) or 527 organizations? If yes:
a) Describe in detail the nature of the relationship(s).
b) Does the organization work with those organization(s) regularly?
c) Provide copies of all related contracts with such organizations.
d) Describe the nature of all contacts with the organizations.
e) Do you share employees, volunteers, resources, office space, etc. with the organization(s)? If yes, explain.
24) You have conducted candidate forums at which candidates for public office were invited to speak. Provide the following regarding all such events since October of 2010:
a) Details, including the nature of the forums
b) The candidates invited to participate
c) The candidates that did participate
d) The issues discussed
e) The time and location of the event.
f) Copies of all materials distributed regarding the forum and provided at the forum, including any internet material discussing or advertising the forum.
25) Have any candidates for public office spoken at a function of the organization other than a candidate forum? If yes, provide the following:
a) The names of the candidates
b) The functions at which they spoke
c) Any materials distributed or published with regard to their appearance and the event
d) Any video or audio recordings of the event
e) A transcript of any speeches given by the candidate(s)
26) Since October of 2010, have you conducted or will you conduct voter education activities (voter registration drives, get out the vote drives, publishing voter guides, distributing voter guides, etc..)? If so:
a) Provide the location, date and time of the events.
b) Who on the organization's behalf has or will conduct the voter registration or get out the vote drives?
c) How many resources (funds/employees/volunteers) are devoted to the activity?
d) Provide copies of all materials published or distributed regarding the activities, including copies of any voter guides.
27) Do you engage in business qealings with any candidate(s) for public office or an organization associated with the candidate, such as renting office space or providing access to a membership list? If so, describe the relationship in detail and provide contracts or other agreements documenting the business relationship.
28) Have you attempted to influence the outcome of specific legislation since October of 2010? If yes, answer the following:
a) Provide copies of all communications, pamphlets, advertisements, and other materials distributed by you regarding the legislation.
b) Do you conduct media advertisements lobbying for or against legislation? If yes, provide copies of any radio, television, or internet advertisements relating to the organization's lobbying activities.
c) Do you directly or indirectly communicate with members of legislative bodies? If so, explain the amount and nature of the communication.
29) Rev. Rul. 75-384, 1975-2 C.B. 204 details a nonprofit antiwar protest organization formed to promote world peace and disarmament by nonviolent direct action and whose primary activity was the sponsoring of antiwar protest demonstrations in which demonstrators were urged to commit violations of local ordinances and breaches of public order. The organization did not qualify for exemption under section 501(c)(3) or (4) of the Code. Please answer the following regarding your protest activities:
a) What percentage of your time and funds are spent protesting?
b) Provide a listing of all of all protests in which your organization has participated.
c) Has your organization committed violations of local ordinances or breaches of public order? If yes, explain.
d) Has your organization ever conducted or promoted any illegal activity? If yes, explain.
e) Has any of your members been arrested by the police during a demonstration? If yes, explain.