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Should nonprofits linked to ‘Anonymous’ and harassment stay tax-exempt?

Are the two nonprofits founded by radical activist and convicted bomber Brett Kimberlin entitled to tax-exempt status? It’s a question worth examining.

Kimberlin is a paid employee of one of the nonprofits, Justice Through Music Project, a 501c3 “educational” nonprofit. JTMP paid Kimberlin $19,500 in 2010 for his services as a director, according to the group’s most recent publicly available tax return. Both JTMP and the other group, Velvet Revolution US, a 501c4 “action” nonprofit, are headquartered in Kimberlin’s Bethesda, Maryland, residence. (JTMP expressly acknowledges in the tax return that the address given is Kimberlin’s.)

Kimberlin spends much of his time attempting to silence conservative bloggers through frivolous and vexatious litigation and by employing other nasty, unorthodox tactics. Incredibly, Kimberlin got blogger Aaron Walker (nom de blog: Aaron Worthing) jailed for daring to  write (factually accurate) articles about him. Kimberlin doesn’t like it when anyone points out his criminal history.

Despite the free speech protections of the U.S. Constitution, a Maryland judge’s so-called peace order forbidding Walker to write about Kimberlin remains in effect – for now. UCLA law professor Eugene Volokh and other notable legal practitioners have volunteered to assist Walker in his defense in a case in which, according to Hans Bader of the Competitive Enterprise Institute, the judge clearly ignored legal precedents.

The Kimberlin case has drawn attention to the cases of bloggers who have been “SWATted.” SWATting, undoubtedly a criminal act, consists of tricking 9-1-1 operators into dispatching emergency response teams to a targeted person’s home. Typically the caller masks his identity using technology and makes it appear that the call is originating from the victim’s home. The caller claims he has killed someone or that shots were fired. This precipitates a massive show of force from police. It’s a brutal prank that could easily get a victim killed.

Last year, both Mike Stack – who was involved in exposing the Anthony Weiner sex scandal – and conservative blogger Patrick “Patterico” Frey were targeted for SWATtings. More recently, Red State editor and CNN commentator Erick Erickson says he was SWATted after he wrote about the Kimberlin case.

The apparently politically motivated SWATtings have received some publicity, garnering coverage from Fox News, CNN, and ABC News. Sen. Saxby Chambliss (R-Ga.) and close to 100 congressmen are now demanding the Obama administration do something about SWATting.

Kimberlin denies having anything to do with the SWATtings. Indeed he even claims to have been the victim of a SWATting himself. No evidence of Kimberlin’s allegation has surfaced and local authorities say it didn’t happen.

Velvet Revolution raises money by routinely making farfetched, unverifiable allegations against conservatives and Republicans, demonizing them and accusing them of criminal activity. The group demanded the arrest of Karl Rove, the late Andrew Breitbart, and U.S. Chamber of Commerce president Thomas J. Donohue. It promotes wild-eyed conspiracy theories about stolen elections which Kimberlin business partner Brad Friedman (The Brad Blog) promotes on his website and when he guest-hosts the Mike Malloy Radio Show. Incidentally, Malloy, Friedman, and Kimberlin are a perfect fit. Malloy is the left-wing ranter who prayed for Glenn Beck to commit suicide and without any credible evidence called Rush Limbaugh a “child molester of the highest order.”

Robert Stacy McCain, a reporter and blogger who had to leave his home after Kimberlin contacted his wife’s employer, reports that a known Kimberlin associate reached out last year to the criminal computer hacking ring known as Anonymous. The same individual is also reportedly linked to the violent Occupy Wall Street movement.

In America no activist group or nonprofit corporation has the right not to pay taxes. But if the group agrees to abide by certain rules laid down by Congress the IRS may grant the organization a tax exemption. This privilege (that may be revoked for cause) allows the entity to avoid paying the various taxes that corporations normally pay.

When a tax-exempt nonprofit organization runs afoul of federal law by doing things it shouldn’t, the IRS may revoke its tax exemption (after which it publishes the group’s name on a running list).

In an article nonprofit attorney Stephen Fishman writes IRS “audits of public charities are meant to accomplish the following objectives.”

-Ensure that nonprofits are truly operated for public (not private) interests.

-Determine whether nonprofits are engaged in any substantial nonexempt (that is, taxable) activity, such as running unrelated businesses.

-Ensure that nonprofits protect and preserve their assets exclusively for tax-exempt purposes.

-Evaluate procedures for accounting for money paid to individuals or noncharitable organizations.

-Determine whether nonprofits pay any excessive compensation, fees, or benefits.

-Determine whether nonprofits engage in lobbying or participate in political campaigns.

-Determine whether nonprofits should be classified as public charities or foundations.

On IRS Form 13909, the Tax-Exempt Organization Complaint (Referral) Form, the tax collection agency lists grounds for yanking a group’s tax-exempt status.  One of those grounds is if:

Income/assets are being used to support illegal or terrorist activities [emphasis added]

Have Kimberlin’s nonprofits forfeited their tax-exempt status by engaging in prohibited activities?

Perhaps it’s time for some lawyers to ponder whether the Justice Through Music Project and Velvet Revolution US deserve to retain their tax-exempt status.

Note: This post was edited for clarity after initial posting. -MV