IRS Bullied Into Granting Crossroads GPS Status as Social Welfare Organization: Statement of Lawrence Noble, Campaign Legal Center General Counsel


Today’s revelation that the IRS has granted Crossroads GPS status as a “social welfare” organization is truly outrageous. It is a dangerous victory for those in Congress who have relentlessly bullied the IRS into refusing to enforce the laws limiting the political advocacy of tax exempt organizations. It was bad enough when the agency buckled to congressional pressure and postponed, until after this election cycle, a rulemaking to clarify the amount of political activity 501(c)(4)s are permitted to undertake while claiming federal tax-exempt status. But giving Crossroads GPS its stamp of approval is further evidence that the IRS no longer has the will to enforce the law. There is little question this will cause a major jump in the use of this privileged tax status to evade disclosure of political spending on a massive scale. 

Crossroads GPS was created by cofounder Karl Rove after he found that some potential big donors were not comfortable giving money publicly to his Super PAC American Crossroads. The Super PAC’s political director Carl Forti freely admitted at the time that they created Crossroads GPS to keep the names of donors secret. From its founding the group appears to have run roughshod over the restrictions on political spending by so-called “social welfare” groups.

By allowing an organization like Crossroads GPS to spend in our elections secretly and with impunity, the IRS has all but guaranteed that similar “dark money” groups will proliferate. It is impossible to defend depriving the public of the true sources of the funding behind the flood of political ads seeking to influence election outcomes as “promoting social welfare.” The public has the right to know who is funding our elections.