Throughout the mostly fake IRS “scandal” the right pretended that it was all about Obama persecuting conservative groups, but the real problem was that the rules governing political non-profits are far too vague and provide little guidance. Now the IRS is proposing new rules to fix that.
The U.S. Department of the Treasury and the Internal Revenue Service issued proposed guidelines on Tuesday that could force dark-money political groups like Crossroads GPS and the American Future Fund to spend less of their money on campaign advertising and other overt electioneering. If implemented, this guidance would clarify what actions by tax-exempt social welfare organizations are limited “candidate-related political activity” and what actions can count toward their principal purpose.
Since the Supreme Court’s controversial 5 to 4 ruling in the Citizens United v. FEC case in 2010, the IRS has seen a large increase in the number of groups applying for 501(c)(4) status— the section of the federal tax code that governs non-profit groups dedicated to social welfare. Some of these 501(c)(4)s have functioned much like super PACs, but evaded campaign finance disclosure laws.
Not all 501(c)(4)s engage in political activity of any kind — the United States Chess Federation, for example, is a fairly apolitical group. Political 501(c)(4) groups are required to adhere to certain rules, including that they not be “primarily engaged” in electioneering activity, in order to maintain their tax-exempt status. In a failed attempt to sort out which groups were apolitical and which needed additional scrutiny, the IRS inappropriately singled out Tea Party groups and some progressive organizations.
But the guidelines for what is and is not an acceptable level of political activity for a (c)(4) hasnever been clear — a vague “primary purpose” test — and has been little enforced. The draft guidance would clarify the question for the first time.
This has long been a problem but it was made far worse by the Christians United ruling. And this also involves the entirely fake distinction between campaign ads and “issues ads.” These 501(c)(4) groups involved in politics spend massive amounts of money, none of it traceable to the source, on ads for and against candidates at every level, but rather than ending with “vote against candidate so-and-so” they say “call candidate so-and-so and tell them you’re against blah blah blah.” And that’s how they get away with claiming that they’re not “primarily political.” But no one can seriously buy that argument and it’s about time that the IRS cracked down on this utterly false pretense.
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