I just did a phone interview with a reporter from TV station KPHO in Phoenix. They’re running a story tonight at 10:00 about my IRS complaint on the Cold Case Posse.
Update:
The story is on their web site and to the credit of KPHO, they interviewed both Zullo and Arpaio. Arpaio reiterated what they told me in the letter—they don’t oversee the Posse. Zullo says that a lawyer set up the posse and he was told he wasn’t supposed to file anything else.
That all sounds fine, except I don’t think he qualifies for a filing exemption. Nobody is overseeing the finances of the Cold Case Posse.
I previously published the response I received from the Maricopa County Sheriff’s Office; however, I did not publish the letter I sent them, which in hindsight is important for a complete understanding of the response’s first paragraph. Here is that text:
To Whom It May Concern:
Pursuant to Arizona statute 39-121.01 I am writing to request copies of the following public records:
- Documents pertaining to the financial management of the Maricopa County Sheriff’s Cold Case Posse by the Maricopa County Sheriff’s Office
- Documents pertaining to the financial oversight of the Maricopa County Sheriff’s Cold Case Posse by the Maricopa County Sheriff’s Office
- Any financial reports provided by the Maricopa County Sheriff’s Cold Case Posse to the Maricopa County Sheriff’s Office
- Records of income and expenditures of the Maricopa County Sheriff’s Cold Case Posse
I want to highlight the one item: “Any financial reports provided by the Maricopa County Sheriff’s Cold Case Posse to the Maricopa County Sheriff’s Office.” When the MSCO responded without any such records, they are representing that they don’t have any. The Cold Case Posse isn’t making financial reports to the MSCO. This supports the non-specific language in the 2nd paragraph about the Sheriff’s posses in general.
Did you call Gallups’ show to chat with Mr. Zullo?
No. Zullo is not on my prayer list.
Was he even on the show today?
The link to the show on his web page fails, so I don’t know. I was told that he was going to be by a couple of people.
I note that I don’t actually recall what my prior 15 minutes of fame was, only that I seem to remember writing about it. 😉
Zullo was on the show and sounded down. Carl Gallups was wound up. They spoke about their friend Miki Booth.
I wonder if his mood had anything do to with KPHO asking him about his IRS filings?
Zullo just got run over by the Arpaio bus.
http://www.kpho.com/story/23098441/questions-arise-over-mcso-cold-case-posses-tax-filings
Now that is a novel idea. Don’t file your tax return for 7 years. Then call the IRS and ask them if everything is OK. If they say sure everything is OK then you are fine and will never have to pay taxes or anything. Why the hell have I been wasting my time buying Turbotax all these years and writing checks to the IRS?
Typical left wing obamamhole: Trying to silence the oposition by any means. . .
Your chin is still dribbling!
Bravo! Arpaio looked like a deer in the headlights. And he completely abdicated responsibility on to Zullo’s shoulders.
Now, in all fairness, this type of problem is pretty common among small non-profits. And the IRS rules are not easy to understand if you’re not an accountant. I recently volunteered to serve as a treasurer for a local non-profit and learned that they hadn’t filed a return for seven years thinking they were exempt from filing. It’s getting fixed.
That said, the whole purpose of the IRS rules is to ensure transparency and that the organization engages in only eligible activities that qualify it for tax exempt status.
It’s all in how you ask the question. We are a 501(c) (3) and we are an affiliate under the financial oversight of a county sheriff’s office. Do we need to file a form 990? Pretty slick.
3 consecutive years of non filing results in an automatic loss of non-profit status.
That was Arpaio’s best Alfred E. Newman response: “What, me worry?? And Zullo did sound nonplussed.
The whole notion that the posses are all on their own……while running around wearing Maricopa County Sheriff’s Office uniforms, badges and performing work assigned by the MCSO……doesn’t pass the laugh test.
It will be interesting to see where this goes from here.
Good work, Doc.
I still can’t wait to see the financial records on the Crown Vic and free gasoline that were provided to Brian Reilly. Can you imagine the perks in addition to profiting on books that Zullo might be giving himself?
The video is up now, and it is more effective in my mind than the transcript alone.
This presents a new opportunity for grifting: Zullo’s Defense Fund.
Then in about a year there will be Zullo’s Defense Fund’s Defense Fund.
I noticed Zullo sounded different on Gallups’ Fact Free Friday program. It sounded like he was in barrel. It could also be because all those imaginary VIP’s aren’t sounding very convincing to the flock any more after Rep. Mullin told Miki Booth to shove her 71 page CCP report and her birth certificate up her Okie and Stockman isn’t going to do anything..
If you give the IRS or even your lawyer the wrong information, you are going to get the wrong advice. That’s what Zullo has done, mischaracterize exactly how the finances are being handled to both. Whether or not the IRS does anything, this should still give donors a warning that their donations may not being used for what Zullo says they are being used for, but for a new pool for Zullo. 😳
Fact Free Friday sounded more like a wake than awake. The VIPs are running to avoid being tainted. Yes he sounded like he was in a barrel going over Niagra Falls. Will Mr. Z be able to pull another rabbit out of his hat? Those black Arpaio tire treads will wash out with a little Resolve and some Tide.
I still don’t get the point of Miki appearing on the show? They were correcting thinkprogress’ article that the congressman wasn’t really a birther and he wanted nothing to do with Miki Booth? How does this make the birther movement look good.
The Maricopa County Board of Supervisors could start asking questions about how county money is being spent and accounted for. It will be interesting to see if they make the move.
I haven’t come up with a plausible reason for them to try to fool the IRS back in 2007, before there were birthers. It could be an honest misunderstanding or sloppy work. I won’t know until I see their Form 1023 paperwork — what they told the IRS.
When you’re chasing your tail it’s difficult to tell where you’re going.
This sums up Z’s mood on the Gallups show.
http://m.youtube.com/watch?v=1vZf2GS4n2A&feature=plpp
Looking at a blank 1023 I’m not sure how you conjure up the notion that a uniformed, gun toting posse is doing educational work but anything is possible.
FYI…..they have updated their filings with the Arizona Corporation Commission are now in good standing. The delinquent report was filed on the 7th, Wednesday.
Dr C is now being reported on FOX 12 in Oregon.
http://www.kptv.com/story/23098441/questions-arise-over-mcso-cold-case-posses-tax-filings
Zullo is paying attention. The posse filed its delinquent annual report with the Arizona Corporation Commission on Wednesday.
It will be interesting to see how Zullo responds to the IRS situation. A smart person would move quickly to change the posse’s status and file all the past 990’s before the IRS does anything. We’ll see.
Did they keep records to file 990s? They better hurry up the clock is ticking.
The problem here is that the “oposition” is already silent, where they shouldn’t have been. They sealed their records. Remember, that’s a bad thing, or so I hear. Doc doesn’t want to silence them, he wants them to yak it on up, like they’re s’posed ta.
WAFB Louisiana
http://m.wafb.com/autojuice?targetUrl=http%3a%2f%2fwww.wafb.com%2fstory%2f23098441%2fquestions-arise-over-mcso-cold-case-posses-tax-filings
The story will pop up on lots of stations depending on which news services KPHO made it available to.
When you’re busy 24/7 trying to save the Republic from the devil usurper you probably don’t have time to keep books.
It will be all over the country by the end of the day.
Are you suggesting the books will be cooked? Add some garlic for flavor. This will be interesting.
Actually I will be surprised if there are any records but we’ll see. Any day now.
I wonder if the Maricopa County Sheriff’s Department provided any of the security for President Obama when he spoke at a Phoenix High School on Tuesday. The President’s motorcade appeared to be City of Phoenix Police Department exclusively.
They could have been since the President went through at least four or five cities and probably through some unincorporated areas during his visit.
Here’s a story from the Republic: http://www.azcentral.com/community/chandler/articles/20130808phoenix-area-officers-obama-safe-during-visit.html
Phoenix probably takes the lead because he arrives and departs from the city and they have the most personnel available for these sorts of things. The MCSO only has about 400 deputies. Phoenix has over 3,000 officers.
I
I went to You Tube to see videos of the motorcade and I saw the white motorcycles leading the procession, followed by Phoenix PD cars.
It would be sweet if Sheriff Joe was guarding the President in Phoenix! 🙂
The article you linked said Phoenix, Chandler and Arizona state police but no Maricopa County participation was mentioned.
They’ve spent at least $9,600.00 of taxpayer dollars. County government should be examining some records.
Ah, the infamous trip to Hawaii. I forgot about that.
Yes indeed.
I wouldn’t expect anything for a couple of years if ever.
If they don’t have anything, even for a couple years, they’re going to have problems sooner than later.
The IRS is going to want to see something even if they get to retain their non-profit status.
Hmmm, gosh, why don’t they want to make fiscal disclosures …..
… because the amount of money involved is hilariously miniscule in relation to the claims made and front presented?
… because it would confirm the birther faithful as a bunch of cheapskate, keyboard warriors, unwilling to pony up or lift a finger?
… because it would reveal that the bulk of the support comes from backers it isn’t supposed to come from (like WND / Western Journalism (and therefore, indirectly, from Farah’s backers))
… because it would reveal more siphoning of taxpayer cash than has already unwittingly acknowledged, and further, that the donations promised as ‘reimbursement’ were never coming?
Or, there’s another possibility .. that the birthers aren’t cheapskates, and that the CCP has attracted a mountain of cash, that’s been used as a slush fund, propping up WND, Arpaio’s re-election effort, keeping everyone in mustache wax, in short going for everything but ‘investigating’ Obama, because the shills know there’s literally no such investigation possible, and that any cash expended on birther litigation / lobbying is cash wasted.
No cash, or too much cash. I’m betting on no cash.
Me too.
Z trying to explain to IRS why no 990s were provided for the past 6 years.
http://m38.photobucket.com/image/svengoolie/mdf3530/Svengoolie.jpg.html?o=24
why Lt Zullu carved a Z in Gallops forehead as proof of his tooth (or is that truth)
Didn’t the birfers say that President Obama would be arrested if he dared step foot in the state of Arizona???
According to Lena, who seems knowledgeable about it, some cash was spent on hookers in Hawaii. I would guess that, if true, would make Zullo reluctant to have a serious audit of how the cash was spent.
At least, Dean Haskins was decent enough to take some exotic poon-tang with him on his Polynesian holiday. The cash he scammed was merely wasted on airfares and hotel accommodations.
Tee hee hee.
An organization that is a “governmental unit” or an “affiliate of a governmental unit” is not required to file a Form 990, but it must have a ruling or determination letter from the IRS that:
(i) Its income, derived from activities constituting the basis for its exemption under section 501(c) of the Code, is excluded from gross income under section 115; or
(ii) It is entitled to receive deductible charitable contributions under section 170(c)(1) of the Code, on the basis that contributions to it are “for the use of” governmental units; or
(iii) It is a wholly owned instrumentality of a state or a political subdivision thereof, for employment tax purposes (see sections 3121(b)(7) and 3306(c)(7) of the Code);
OR if it does not have such a ruling or determination, the organization must be:
(i) “operated, supervised, or controlled by” governmental units, or by organizations that are affiliates of governmental units, within the meaning of section 1.509(a)-4(g)(1)(i) of the regulations, or the members of the organization’s governing body are elected by the public at large, pursuant to local statute or ordinance; and
(ii) It possesses two or more of the following affiliation factors:
(a) The organization was created by one or more governmental units, organizations that are affiliates of governmental units, or public officials acting in their official capacity.
(b) The organization’s support is received principally from taxes, tolls, fines, government appropriations, or fees collected pursuant to statutory authority.
(c) The organization is financially accountable to one or more governmental units. This factor is present if the organization is (i) required to report to governmental unit(s), at least annually, information comparable to that required by Form 990; and (ii) is subject to financial audit by the governmental unit(s) to which it reports. A report submitted voluntarily by the organization does not satisfy clause (i). Also, reports and audits pursuant to government grants or other contracts do not alone satisfy this paragraph (c).
(d) One or more governmental units, or organizations that are affiliates of governmental units, exercise control over, or oversee, some or all of the organization’s expenditures (although it is not financially accountable to governmental units as described in paragraph (c) of this section).
(e) If the organization is dissolved, its assets will (by reason of a provision in its articles of organization or by operation of law) be distributed to one or more governmental units, or organizations that are affiliates of governmental units.
Rev. Proc. 95-48, 1995-2 C.B. 418, 1995-47 I.R.B. 13
Even if an organization has met these requirements and therefore is not required to file a Form 990, it nevertheless has an obligation to file Form 990-T, Exempt Organization Business Income Tax Return. Id. There is no evidence that the CCP filed 990-Ts for each year since its formation.
It is my understanding that the Maracopa [sic] County Cold Case Posse requested, and received, recognition as a tax-exempt educational organization, not as an affiliate of a governmental unit. If this was not the case, the CCP should have no hesitation in providing the 2007 determination letter that allows it to operate as an affiliate of a governmental unit.
By law, that determination letter must be made available for inspection by any member of the public. Perhaps KPHO will make a request to inspect it.
If the determination does not rule that CCP is an affiliate of a governmental unit, it must qualify under the savings provision. Clearly, factors (a) and (b) don’t apply here, and Joe Arpaio has denied that (c) is the case, so that leaves only (d) and (e).
I think that Arpaio’s statement, and the letter I got from the MCSO saying that they had no responsive records related to oversight rules out (d) and their Articles of Incorporation, which say assets go to “charity” rules out (e).
Let’s assume then a benign option, that the MCSOCCP actually has an IRS determination that it is an affiliate of a governmental unit, and that Zullo just didn’t visit the PO Box where they receive donations for 15 days and never saw notice of my certified letter asking for their Form 1023 and their determination letter.
That leaves us with the question of exactly how the9 qualified, why other MCSO posses DO file Form 990, and whether their current activities are consistent with the determination.
The Instructions for Form 1023 (at page 5) as well as IRS Publication 557 describe the documents that an organization must make available for public inspection, as well the manner in which they may be made public on the org’s website. At all times the organization must maintain the determination letter and its application, Form 1023, and all supporting documents at its home office and must publicize where the public can view these documents and the business hours of the office.
All of the above information in these two posts was quickly located via the Internet with a Google search. Even a fifth grader could have found it. I plugged in the search terms “501(c)(3) governmental unit” and all of this information was in the third hit.
Why is this news outside of Phoenix?
Good question. The only response I can think of is that the CCP was formed by a different attorney than the other posses, and that he sheparded through a Form 1023 based on the government affiliate that the other posses did not pursue. That is why inspection of the determination letter and the Form 1023 are so important. The CCP, by law, MUST make both available for public inspection during its regular business hours at its main office.
KPHO is in the best position to make such a request. While the reporter is at it, a request should be made for the 990-Ts from 2007 through 2012.
Nationwide hope of a perp walk with Sheriff Arpaio in cuffs and pink underwear?
Slow news day in Portland! Arpaio is a well know character and my guess is that the show producer had a hole in his/her show, saw the piece on the feed and decided to use it.
One more observation.
The Internal Revenue Code imposes a penalty for failure to file a required return (IRC 6651(a)(1)) — including returns required of exempt organizations — and, for exempt organizations that fail to meet the public inspection requirements a penalty is assessable under IRC 6685.
Further, IRC 6652(c)(1)(B) imposes a penalty on the manager or other person who fails to comply with a written demand from the IRS that the organization file required returns or furnish particular information.
See http://www.irs.gov/irm/part20/irm_20-001-008r.html#d0e445
All the posses are independent operations and most of the others were formed years, if not decades, before Zullo’s operation.
As far as the posse’s “main office” is concerned it doesn’t have one. It uses a post office box in far north Phoenix, as Doc found out.
Since it appears the sheriff has washed his hands of the operation there won’t be any information forthcoming from official quarters so it will depend on someone being able to get an official request before a manager/member of the posse. Don’t hold your breath waiting for that to happen.
Same with any type of 990. They haven’t prepared or filed any.
As I said earlier it will be interesting to see if they’re smart enough to preempt Doc’s complaint and change their status and file the past due returns.
Any day now.
This is going to be a test for Mr. Zullo. Is he smart enough to get himself out of this fix? It will also be interesting to see if the other members stick with him.
The news was reported in Louisiana, Oregon, Alabama, Arizona, Virginia and possibly other states. They had the same Phoenix, Arizona KPHO report.
To change status will require a request for a determination letter, with the applicable user fee. An organization may not simply “abandon” its status.
Filing delinquent returns is always a good idea. The statute of limitations does not begin to run until a return is actually filed.
I agree they can’t unilaterally change their status but they could call the IRS and say, “Oops, it looks like we may have made a mistake. How do we fix it?”
We’ll see.
These are the experts looking into the President’s birth certificate?
Better yet, Zullo could simply visit the walk-in customer service center at Osborn and Central, where they will advise him that the way to fix it is to file the missing returns.
An accountant should be able to reconstruct the financial records and prepare the 990s for a few thousand; that might curtail the travel budget somewhat. But best do it soon. The October 15 filing deadline is looming and accountants get busy after the Labor Day holiday.
Zullo states that he received legal advice that the CCP had no filing obligation. A sworn declaration from the attorney who gave that advice may be sufficient to get the CCP out of penalties, under Ninth Circuit law. (Of course, the attorney willing to make such a statement under penalty of perjury would be advised to notify his Errors & Omissions carrier.)
CarlOrcas:
“This is going to be a test for Mr. Zullo. Is he smart enough to get himself out of this fix? It will also be interesting to see if the other members stick with him.”
I wouldn’t want to be a Director for the CCP public charity right about now, would you?
I think not. They should read up on the duties and responsibilities of officers and directors of non-profits.
As I recall the IRS office is just south of Indian School…..right across from the location of the first McDonald’s franchise…but that’s another story. I doubt Zullo will be going anywhere near the building if he can avoid it.
You’re right about what an accountant could do but that would require some real business records and I will be surprised if the posse has them…..beyond bank statements….in any sort of order.
Same with the legal stuff. I doubt any lawyer is going to bail them out, especially if he/she wrote the articles of incorporation.
If they clean things up I doubt they will have problems. The IRS has other things to worry about. The real question is whether they have the records to put together six or seven years of returns.
“The IRS is harrassing us with improper fines, PLEASE DONATE.” So predictable…
If I were likely to believe in conspiracy theories, I might claim the CCP is doing this on purpose – after all, “being targeted by the IRS” has become synonymous with “targeted by the government as political enemy” in the right-wing worldview.
So it creates more false impressions of the “if Obama sent the IRS on them, it means what they have is legit” kind.
I am not a lawyer or an accountant but I doubt most people want to donate to a organization that is a target…..especially since it probably means any donation you make could be disallowed.
Zullo is kind of between a rock and a hard place right now. It will be interesting to watch how he gets out of it.
Who is the Senator from Oregon?
Could it possibly be Ron Wyden? The staunch defender of free speech!
As usual …. What are you talking about, Mr. “Helen”?
The piece got picked up for its gee-whiz water cooler chitchat value … Arizona took Arkansas’ place as America’s backwards laughingstock. Local news is all about market share; chasing those ratings. It can be cruel and heartless.
I would not be sure of that position as I believe that the courts in California say that the advice from attorneys is not a defense, unless the attorney is charged with enforcing the law in question.