Little conservative group gives up in non-profit status battle with IRS

M.D. Kittle | Wisconsin Reporter

MADISON, Wis. – Marve Munyon and his two fellow members on the Rock River Patriots board of directors finally were forced to throw up their hands.

The Internal Revenue Service has a way of doing that to people.

After being hounded for years, the group with the tea party-sounding name gave up its pursuit of 501(c)(4), tax-exempt status, took the best deal it could get and walked away from the fight.

“We finally got out from underneath that mess,” Munyon told Wisconsin Reporter.

Like so many other conservative, limited-government organizations in recent years, the Rock River Patriots were subjected to intense scrutiny and penalties from the IRS, Munyon said.

This small group went up against a government titan, and after being buried in paperwork the Rock River Patriots were forced to retreat.

“We bring in speakers, meet regular, discuss the issues of the day and try to educate and inform. We try to get the public involved, I guess,” Munyon said. “I don’t know if (the IRS) looked at us as a little entity they could bully around. We got stacks of correspondence and it got so overwhelming … all of our time and effort was consumed by them.”

The Rock River Patriots were caught in an administrative Catch-22. Munyon in April 2012 applied for 501(c)(4) designation for the group, as a pending tax-exempt, “social welfare” organization.

The IRS cashed the group’s $400 application fee on May 2, 2012, according to documents.

Munyon was informed by letter in January 2013 the IRS was delayed in reviewing applications for tax-exempt status, all the while the meter was running on the conservative organization’s tab with the IRS.

The IRS did offer a deal, Munyon said — an offer the limited-government advocate had to refuse.

An IRS agent in Ogden, Utah, informed Munyon that if he could pledge the Rock River Patriots never violated an election law in the past, were not violating any such laws at present and would never do so in the future, the IRS would guarantee the group a favorable ruling on its tax-exempt status within two weeks.

“I said, ‘If you have not been able to grant us a favorable status in two years, how could you grant it to us in two weeks?’” Munyon told Wisconsin Reporter in January. “Their comeback was that they ‘didn’t call to argue. We called you to help you.’”

The agency’s ‘help’ eventually amounted to “failure to file” fees and “failure to pay” penalties that amounted to nearly as much as the application fee. And the fees kept mounting even as the IRS deliberated on whether the group would make the 501(c)(4) cut.

Finally, after two years, hours of phone calls, continuous correspondences and growing aggravation, the IRS refunded the Rock River Patriots the penalties — a total of $153.65, plus two checks for $1.16 and $3.04, without explanation, Munyon said. The Wisconsin Department of Revenue refunded the group $150 in late fees and charges, he said.

The IRS did not return a request seeking comment.

The IRS would not return the $400 application. Munyon said an agent told him that if the Rock River Patriots wish to apply again for nonprofit status the group would need to submit another $400 with a new application.

No thanks, Munyon said.

The little limited-government group is now a for-profit organization.

“We don’t have any profit but we are a for-profit organization,” Munyon said chuckling. “We have moved on.”