Internal Revenue Service

Obama looks at a folder on his desk.

Source: Associated Press

Last Tuesday, the Obama administration proposed a new set of rules that would crack down on the use of “dark money,” or anonymously donated money, in political elections. 

Though the proposed rules, released by the Treasury Department and the Internal Revenue Service, do not apply specifically to Texas, there are more than a few Texas political organizations that would find themselves affected. Texans for Fiscal Responsibility, a project of the infamous tea-party activist Michael Quinn Sullivan’s Empower Texans group, may be the most prominent. 

The proposed reforms are timely: In 2006, tax-exempt groups across the country spent only $5.2 million on political activities. By 2012, that number had risen to $300 million, suggesting that the checks of big-time donors had found their way to politically-oriented nonprofits. 

Critics of the new regulations are already claiming that the proposed rules would do little, if anything, to stop anonymous corporate money from finding its way to political campaigns. But that doesn’t mean the administration is foolish for trying. 

In a piece published last Tuesday in Politico, Byron Tau and Lauren French wrote that the new rules “are unlikely to stem the tide of anonymous donations that have flooded into politics since the 2010 Citizens United Supreme Court decision.” That decision, made by a 5-4 vote, ruled that the government could not limit the ability of corporations to donate to political campaigns.

501(c)4s, the organizations targeted by the new rules, are currently defined as groups whose primary purpose is “social welfare.” However, the current tax code fails to clearly define what constitutes “social welfare.” 

“Many election lawyers and their clients use an unofficial rule of thumb: If a tax-exempt group spends less than 50 percent of its budget on political activity, then its primary purpose is not winning campaigns,” explained a New York Times article on the topic.

Under the draft of the new regulations, “social welfare” would exclude “candidate-related political activity.” What counts as candidate-related political activity? Under the draft, communications that expressly advocate for a candidate, campaign contributions and voter registration drives, among other activities, would all count. 

There’s a justified concern from conservative groups that the new rules are meant to limit the influence of growing grassroots organizations.

“I think it’s Obama’s revenge against people who have been participating in the process on the other side from him,” Charles Spies, the founder of the Pro-Mitt Romney Restore our Future Super PAC, told Politico about the new regulations. 

It’s hard to forget the recent  IRS scandal, in which the agency was found to have been excessively auditing tea-party organizations that had applied for nonprofit status.

As concerning as the potential implications for free speech is that the new rules would apply only to 501(c)4 entities, meaning that donors looking to obfuscate their actions can simply elect to check a different box on their tax form and ignore the new rules entirely. For example, organizations may easily escape the new regulations by converting into a Limited Liability Corporation, or LLC, which would not be subject to the new rules. 

It should be noted that the problem isn’t that corporations are donating to political campaigns, but rather that they are doing it anonymously through nonprofit organizations, making it impossible to track who is funding whose campaign.

These regulations then, though well-intentioned and on point, are problematic in that they regulate nonprofit entities, not the action itself of corporations anonymously donating large sums of money. But unless the Supreme Court reverses Citizens United, these new rules may be the best we can do to limit the influence of corporate America in the ballot box.

As tax season approaches, students have a unique opportunity to reduce their tax burden with a form that enables tuition payers to receive tax credits with their returns.

The 1098-T form decreases the tax liability for those who are enrolled in a post-secondary education program, giving students or their parents some extra cash on their returns.

“Students should pay attention to their form 1098-T, because that form has information about the qualified tuition and expenses that could turn into cash in their pockets,” Lillian Mills, accounting professor and department chair, said.

UT submits 1098-T forms to the IRS automatically each year, which can be accessed through UT Direct. Although tax credits act similarly to deductions, credits can sometimes be more beneficial, according to accounting lecturer Kristina Zvinakis.

“You benefit from a deduction because it’s reducing your income, and then you have less income on which to pay tax,” Zvinakis said. “The credit is more beneficial because you calculate what you actually owe to the IRS, and to the extent that you are eligible for these education credits, you reduce your liability, dollar for dollar.”

Despite the fact that taxes can seem intimidating, Zvinakis said students can submit the form correctly if they follow the rules.

“I think that with a little bit of effort, it’s possible to read the instructions and understand how to calculate the credit,” Zvinakis said. “I also think that there are services available for low-income tax payers — which for the most part, students tend to be low-income tax payers — and so I think that those services are also hypersensitive to the fact that their services are beneficial, and so could provide some guidance.”

Accounting graduate student Kathleen Powers will host a seminar Thursday to discuss applying university income, such as scholarships, fellowships and stipends, to taxes. 

“The seminar is directed to graduate students,” Powers said, “but will probably apply to some undergrads as well.”

Printed on Tuesday, February 2, 2013 as: Tax season can mean extra cash for tuition payers 

Fans will get a chance to explore the incredible boredom that surrounds the Internal Revenue Service in David Foster Wallace’s posthumous novel, “The Pale King,” released three years after his death.

More than 60 people heard excerpts from the book and attended a reception in the Harry Ransom Center on Friday. The center holds an archive of Wallace’s work and notes, which will be on display in “Culture Unbound: Collecting in the Twenty-First Century” until July 31.

“I think he did have such a committed following. He has so many readers who were obviously so dismayed at his death and so happy that they have this opportunity to have something else from him,” said Danielle Sigler, curator for academic affairs and event coordinator.

Wallace died by suicide in 2008.

Editor Michael Pietsch pieced the book together from Wallace’s notes.

The novel “takes agonizing daily events like standing in lines, traffic jams and horrific bus rides — things we all hate — and turns them into moments of laughter and understanding,” Pietsch said in a September 2010 statement.

Time Magazine included Wallace’s bestselling 1996 book, “Infinite Jest,” on its All-Time 100 Greatest Novels list.

English senior Hunter Knox said having the collection available at the University was a way to learn more about how Wallace may have approached writing and to better understand his works.

“Having that available is a tool that can help young writers or people who just want to learn more about Wallace,” Knox said. “We’ll never really be able to understand and get inside his head, and I think that to think that we would be pretty foolish, but it gives us a better idea and helps us come to terms with his place in contemporary literature.”

The Austin Public Library Friends Foundation’s New Fiction Confab and BookPeople co-hosted the event.

“[The Pale King] is deeply experimental,” said local author Amelia Grey. “He was really famously obsessed with avoiding cliche at that line level and wanted to take any possible cliche and break it down, so your brain has to slow down when you’re reading it.”

Jenn Shaland, an English graduate student, is concentrating her studies on Wallace.

“It’s a tricky thing. He doesn’t get to edit it down to its final version,” she said.