Will the IRS Screw #PHLDNC?

dnc2016While the Cleveland host committee for the RNC has been granted tax-exempt 501(c)3 status, the Philadelphia Host Committee has not. While the Committee applied in May of 2015, and the approval process normally takes about three months, as of 1 July 2016, the IRS “has issues with it of some sort”. (Philadelphia Inquirer, July 3, 2016, page A3.)

The IRS said that the issues are “technical” but gave no details. The IRS requires of a host committee that it spend money for infrastructure projects outside the convention hall.  It appears that the preparation of the Wells Fargo Center, transportation costs and technology might fall under that since they would benefit Philadelphia.

The goal was to raise $60 million, of which $46.5 million would be in cash, and the rest in-kind. $10 million is expected from the state of Pennsylvania, and currently, there is a $4 million gap. Here’s the rub. If the committee cannot get 501(c)3 status, it would convert to a 501(c)6 status. That’s a designation used for business leagues and chambers of commerce and the like. If they do, any monies coming from businesses would be deductible as business expenses, but money from individuals would not be deductible nor tax exempt.

It is an incredible irony that the GOP, ostensibly the party of corporatism, has full tax-exemption, and the Democratic Party, ostensibly the party of the people, may only be able to offer the benefit to corporations.

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