Opinion ID: 613010
Heading Depth: 3
Heading Rank: 2

Heading: Care's Tax Filings

Text: Approximately six weeks after incorporating Care, Muntasser applied to the IRS to have Care designated as a tax-exempt charity. In order to obtain tax-exempt status, an organization must file an initial application for tax exemption, IRS Form 1023, in which the organization demonstrates that it is organized and operated exclusively for a qualifying purpose. [6] In Care's Form 1023 filing, Muntasser represented that Care had not yet become operational, an inaccurate statement, but that within a couple months it would engage in humanitarian projects such as providing assistance to victims of natural and man-made disasters, sponsoring orphans in disaster areas overseas, and developing rehabilitation programs for refugees coming from overseas. Although the form asked for a detailed narrative description of all of the activities of the organization past, present, and planned, Muntasser did not disclose Care's hosting of religious speakers, its sale of materials advocating jihad, or its publication of the Al-Hussam newsletters (by that point, Care had already published at least two Al-Hussam newsletters in its own name). Nor did he disclose that Care's orphan sponsorship program would target the orphans of martyred mujahideen. [7] In response to a question asking for the details of the organization's fundraising program, Muntasser stated that mailings will commence within the next couple of months. He did not specifically describe the Al-Hussam newsletters or the Zakat Calculation Guide as fundraising devices, nor did he attach them in response to the form's request for representative copies of solicitations for financial support. Lastly, Muntasser denied that Care was an outgrowth of or successor to any other organization, despite Care's obvious ties to Al-Kifah's Boston branch. Based on the information provided, the IRS approved Care's application for tax-exempt status without requesting additional verifying information. At trial, the IRS employee who approved Care's application testified that he would have requested copies of the Al-Hussam newsletter and the Zakat Calculation Guide if their existence had been disclosed in the application. He further testified that, if he had seen the Zakat guide, he would have requested further documentation of Care's day-to-day activities. Similarly, if Muntasser had disclosed the relationship between Al-Kifah and Care, he would have requested information about Al-Kifah, including whether it was a tax-exempt organization in the United States. In order to maintain its tax exemption, Care had to file annually IRS Form 990, disclosing the earnings and activities of the organization. Between 1993 and 2002, each of the three defendants signed and filed at least one Form 990 on Care's behalf. In 1996, Muntasser filed delinquent Form 990s for the tax years 1993, 1994, and 1995. In 2000, Al-Monla signed and filed the delinquent 1998 Form 990. In 2000, 2001, and 2002, Mubayyid filed amended Form 990s for the 1997, 1999, and 2000 tax years. None of the Form 990s filed by the three defendants revealed that Care was publishing or had published the Al-Hussam newsletters, that Care was operating a website through which it solicited donations and provided access to articles from the Al-Hussam newsletters, that Care was regularly hosting pro-jihad speakers, or that Care was selling books and tapes on the subject of jihad. Although Muntasser had failed to disclose these same activities in Care's initial application, Form 1023, each of the defendants answered No when the Form 990s asked whether the organization engaged in any activities that had not previously been reported to the IRS. Instead, each Form 990 filed by the defendants depicted Care as engaging in just four program services: food distribution, cash assistance to orphans and widows, medical assistance to refugees, and grants to other welfare organizations.