IRS: Agency Urged to Curb Crossroads GPS Abuse of Tax Status in Wake of Secret $10 million Contribution to Run Attack Ads


In a letter sent to the IRS today, Democracy 21 and the Campaign Legal Center again called on the agency to investigate and take appropriate enforcement action against Crossroads GPS for its apparent misuse of a privileged tax status.   The letter specifically calls attention to a secret $10 million dollar contribution to the 501(c)(4) group to run attack ads that The Washington Post recently brought to light.

Political operatives are increasingly turning to the 501(c)(4) tax status to hide their donors from the public despite the fact that they are not “social welfare” organizations but are primarily dedicated to supporting and opposing candidates and are poised to spend hundreds of millions of dollars on election advertising this year.

“The continued refusal by the IRS to reign in scofflaws abusing a privileged tax status has only encouraged even more blatant disregard for the law by these groups and their anonymous funders,” said J. Gerald Hebert, Executive Director of the Campaign Legal Center. “A secret ten million dollar contribution to run attack ads shows pure contempt for the law, the agency’s willingness to enforce it, and the public’s right to know who is funding our elections.  The IRS must do its job and enforce the law even in the face of political pressure to let the scofflaws continue.”

“It is essential that the IRS act to stop the farce that Crossroads GPS is a ‘social welfare’ organization,” said Fred Wertheimer, Democracy 21 President. “Karl Rove and Crossroads GPS are thumbing their nose at the American people. They are injecting secret, million dollar and multi-million dollar contributions into federal elections in direct conflict with the basic right of citizens to know the donors financing campaign expenditures to influence their votes. This cannot be allowed to continue. The IRS must take action against all groups not entitled to 501(c)(4) tax-exempt status.”

In addition to calls to investigate Crossroads GPS, the brainchild of long-time Republican party operative Karl Rove, the letter called on the IRS to enforce the same laws with regard to Priorities USA, American Action Network and Americans Elect, other organizations in apparent violation of their 501(c)(4) tax status.

Priorities USA is a group that backs President Obama’s re-election, American Action Network is a group founded by former U.S. Senator Norm Coleman that supports Republican candidates, and Americans Elect is a group that has gained ballot access as a political party in numerous states to run a candidate for president. These groups also claim status as tax-exempt “social welfare” organizations.

To read the full letter, click here.