After over 1 year of "deliberation" regarding our non-profit application, IRS mailed this rejection letter on Dec. 23, 2000. They did not offer us a chance to negotiate, or to change our web site in order to conform with their arcane regulations. We believe they deliberately posted this letter immediately before Christmas so that the mail would be delayed (it was), and so that there was a higher chance that our legal counsel and other experts would be unavailable to help us respond to this letter.
Department of the Treasury
Internal Revenue Service
Washington, DC 20224Dec. 21, 2000 (the actual DC postmark was 12/27/00)
Contact Person:
Will Chapman
Identification Number: 50-12804
Contact Number: (202) 283-8912TO:
Adversity.Net, Inc.
802 Argyle Road
Silver Spring, MD 20901-3202Dear Applicant:
We have considered your application for recognition of exemption from federal income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3). Based on the information submitted, we have concluded that you do not qualify for exemption under that section. The basis for our conclusion is set forth below.
You were organized on Sept. 22, 1999 as a Maryland nonprofit corporation. Your articles of incorporation set forth purposes to conduct and publicize research on affirmative action, minority and disadvantaged business programs, women-owned business programs, government contracting policies pertaining to such programs and policies, race-based and gender-based governmental aid programs, and general discrimination based on age, rage, ethnicity or gender. Your primary means of publishing information is through a Web site, www.adversity.net. Your Web site describes you as "a civil rights organization for color blind, race blind, and gender blind justice," providing "information and support for victims of reverse discrimination." You use the term "reverse discrimination" reluctantly and only because it is so widely understood; in your opinion, there is only one kind of discrimination. The Web site describes your philosophy as opposing all forms of discrimination, with a special focus on discrimination caused by the granting of preferential treatment based on race, ethnicity, and gender.
Your Web site consists of various items of information pertaining to reverse discrimination, including:" "horror story" case studies; news stories and editorials; definitions of various terms used by groups that favor reverse discrimination; a list of public interest law firms and other attorneys who represent victims of reverse discrimination; links to other organizations supporting color blind justice; and an unmoderated message board. Your news stories include excerpts from news stories published by other news organizations, interspersed with your own commentary.
Tim Fay and Dave Diersen comprise your board of directors. According to the board of directors page of your Web site,
In 1987 it became painfully clear to Mr. Fay that liberal Democrats were enforcing reverse discrimination policies that were costing Mr. Fay and his staff their livelihoods, and he began voting exclusively for political candidates who supported race-blind, equal treatment under the law for ALL citizens, regardless of race or gender. Since that time Mr. Fay has steadfastly honored his vow to never, ever vote for any official who supports racial preferences, race-based targets, goals, set-asides or any other race-based, gender-based program.
Your news coverage contains a substantial amount of coverage of the 2000 Presidential race. Some articles published on your Web site appear slanted or biased against Democratic candidate Al Gore in favor of Republican candidate George W. Bush. The following statements are published under the link "Racial Politics 2000":
Al Gore is continuing the Democrats’ brainwashing of blacks for their votes....Al Gore, Jr. knows he has to perpetuate the civil rights deceptions and outright lies to ensure that blacks will continue to be used to further the socialistic and secular humanistic agendas of the Democratic Party. God forbid if blacks knew the truth about what the party really stood for. Think about it. If the Democratic Party has to continue to lie and deceive you for your support, what have they to hide? A lot, my friend - a whole lot. (special/politics.htm pp. 2 - 3)
Al Gore Panders to Black Politicians .... [Gore] noted that a turnover of the House from Republican to Democratic control in the 2000 election would pub blacks in key committee chairmanships [and allow them to wreak havoc on the constitution]. (special/politics_1 p. 3)
Implicit in Gore’s pandering for Hispanic votes was the idea that white children already have received more than their share of educational opportunity. (special/politics_1 p. 3)
Using typical Clinton-speak, Gore said the White House is "trying to prevent discrimination before it occurs", in other words by assuming that all non-minorities are guilty of discrimination. Missing from Gore’s speech was any mention of due-process for accused discriminators, or any mention of the fact all of his so-called civil rights enforcement initiatives merely devolve into counting racial heads to establish a de facto case of discrimination without any proof of actual discrimination much less intent .... Reuters quoted Gore "These funds will help ensure that no American is denied a job, a home, or an education because of their race, color, creed, gender, or religion [unless they are white]. And instead we will help ensure equal opportunity for all Americans [unless they are white]." (special/politics_1 p. 5-6)
"Vice president Al Gore says he believes President Clinton’s enemies are motivated by the president’s efforts to "improve" race relations(!) and "enhance" the status of women and the poor." Al Gore is correct insofar as those of us who have been screwed by Clinton’s racial quota policies are mad at Clinton, and many of us would support any measure to defeat the President. But Al "the bore" Gore is absolutely incorrect in assuming that those of us who oppose Clinton’s racial quota policies are a "wild and woolly fringe" of opposition. (special/politics_impeachment p. 1)
Your link "About Us" includes the following statements:
We are YOU! We are the victims and survivors of racial preferences, quotas, set-asides, and race-based "targets" and "goals" in hiring, promotion, school admissions, and government contracting .... The vast majority of voters are now, and always have been, opposed to racial preferences enshrined in various statutes, regulations and policies .... Who are the non-minority supporters of racial preferences? .... (C) Political Appointees and Government Employees .... This is the group that Al Gore is counting on to get him elected as the next Bill Clinton, Jr. (about_us p. 2)
The following statements are published under the link "Racial Politics 2000: George W. Bush on Quotas":
If I am president of the United States, I will eliminate racial preferences, quotas. George W. Bush (special/george_bush p. 1)
OK, Bush has refused to directly say he supports California’s infamous Proposition 209 because to do so would undoubtedly alienate this state’s huge minority-special interests who favor preferential treatment based on skin color. Nonetheless, Bush remains the only viable 2000 presidential candidate who has even weakly spoken against the use of quotas and preferences. (special/george_bush p. 4)
Today, the Campaign for a Colorblind America praised Texas Governor George W. Bush for telling the Associated Press in New Hampshire that he opposes racial quotas and preferences. Bush’s latest statement is consistent with his responses to the Campaign for a Colorblind America’s 1998 questionnaire on race. Bush scored 100% on the survey, indicating his opposition to preferences in education, hiring, and contracting. (special/George_bush p. 5)
Another link referred to as "some of our favorite editorials" includes the following statements regarding Congresswoman Maxine Waters:
"She is one of the most self-serving, hate-filled, race-obsessed politicians in America. The Democratic Party doesn’t just embrace her. It kneels at her feet .... Maxine Waters has a long and ignominious history of race-baiting and forgiveness of lawlessness when crimes are committed by the ‘disadvantaged’ minorities who comprise her prime constituency .... Malkin concludes her article by criticizing the Democrats for including "in its leadership a snarling bomb-thrower [Waters] who exploits every opportunity to play the race card and cash in on collective guilt and fear .... As a member of the House Committee on Banking she has shamelessly promoted legislation .... In the wake of the 1992 LA riots, Rep. Waters bullied the Community Development Block Grant program to provide three million dollars ...." (FRAMES/Editorials p. 1-2)
Section 501(c)(3) of the Internal Revenue Code exempts from federal income tax organizations organized and operated exclusively for charitable, educational, religious, and certain other exempt purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
Section 1.501(c)(3)-1(c)(3)(I) of the regulations provides that an organization is not operated exclusively for one or more exempt purposes if it is an "action" organization.
Section 1.501(c)(3)-1(c)(3)(iii) of the regulations provides that an organization is an "action" organization if it participates or intervenes, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office. The term "candidate for public office" means an individual who offers himself, or is proposed by others, as a contestant for an elective public office, whether such office be national, State, or local. Activities which constitute participation or intervention in a political campaign on behalf of or in opposition to a candidate include, but are not limited to, the publication or distribution of written or printed statements or the making of oral statements on behalf of or in opposition to such a candidate.
Rev. Rul. 78-248, 1978-1 C.B. 154, held that certain "voter education" activities conducted in a nonpartisan manner by a 501(c)(3) organization would not constitute prohibited political activity. The ruling set forth situations involving compilations of toting records of all Members of Congress and "voter guides" of candidate positions on issues. A publication may constitute political intervention if it contains editorial opinion, or its contents and structure imply approval or disapproval of any Members or candidates or their voting records or positions on issues (as where the publications focus on a narrow range of issues or questionnaire questions evidence a bias on certain issues), particularly if distributed widely among the electorate during an election campaign, even if the publication does not contain an express statement supporting or opposing a candidate.
Rev. Rul. 80-282, 1980-2 C.B. 178, held that a 501(c)(3) organization did not intervene in a political campaign where it distributed in its monthly newsletter a summary of the voting records of congressional incumbents on selected issues important to the organization and an expression of the organization’s position on those issues, under the following circumstances. The newsletter was distributed only to the usual subscribers who together numbered only a few thousand nationwide, and was not targeted toward particular areas in which elections were occurring. The voting record summary was distributed as soon as practical after the close of each congressional session, and its distribution was not geared to the timing of any federal election. The newsletter was politically non-partisan, did not mention any political campaigns, elections, or candidates, and did not contain any express or implied endorsements or rejections of any incumbent as a candidate. No mention was made of an individual’s overall qualification for public office. The voting records of all incumbents were presented and candidates for re-election were not identified. The newsletter pointed out the limitations of judging the qualifications of an incumbent on the basis of a few selected votes and noted the need to consider such unrecorded matters as performance on subcommittees and constituent service.
We have determined that you are not organized and operated exclusively for exempt purposes, on the ground that you intervene in political campaigns. You are primarily concerned with opposing reverse discrimination, including racial/ethnic/gender preferences and quotas. Your news stories and commentaries relating to the candidates focus on their statements and positions on these issues. Numerous statements throughout your Web site evidence your identification of the Democratic Party with reverse discrimination policy and programs, and your disdain for the Party for its promotion of such policy. You published a number of statements on your Web site, apparently throughout the campaign season, evidencing a bias against Democratic candidate Al Gore and favoring Republican candidate (now President-elect) George W. Bush. Also, you published a number of derogatory statements against Democratic Congresswoman Maxine Waters, who was running for reelection in 2000, amounting to an intervention in opposition of her candidacy.
Accordingly, you do not qualify for exemption as an organization described in section 501(c)(3) of the Code and you must file federal income tax returns.
Contributions to you are not deductible under section 170 of the Code.
You have the right to protest this ruling if you believe it is incorrect. To protest, you should submit a statement of your views to this office, with a full explanation of your reasoning. This statement, signed by one of your officers, must be submitted within 30 days from the date of this letter. You also have a right to a conference in this office after your statement is submitted. You must request the conference, if you want one, when you file your protest statement. If you are to be represented by someone who is not one of your officers, that person will need to file a proper power of attorney and otherwise qualify under our Conference and Practices Requirements.
If you do not protest this ruling in a timely manner, it will be considered by the Internal Revenue Service as a failure to exhaust available administrative remedies. Section 7428(b)(2) of the Code provides, in part, that a declaratory judgement (sic) or decree under this section shall not be issued in any proceeding unless the Tax Court, the United States Court of Federal Claims, or the District Court of the United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service.
If we do not hear from you within 30 days, this ruling will become final and a copy will be forwarded to the Ohio Tax Exempt and Government Entities (TE/GE) office. Thereafter, any questions about your federal income tax status should be directed to that office, either by calling 877-829-5500 (a toll free number) or sending correspondence to: Internal Revenue Service, TE/GE Customer Service, P.O.Box 2508, Cincinnnati,OH 45201. The appropriate State Officials will be notified of this action in accordance with Cod section 6104(c).
When sending additional letters to us with respect to this case, you will expedite their receipt by using the following address:
Internal Revenue Service
Will Chapman, T:EO:RA:T:2
1111 Constitution Avenue, N.W.
Washington, DC 20225If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
Sincerely,
/s/ Robert Fontenrose (initialed by WLT)
Robert Fontenrose
Acting Manager
Exempt Organizations
Technical Group 2
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