IRS: Watchdog Groups Urge House Committee to Investigate Failure of IRS to Enforce the Tax Laws


In a letter sent today to the House Ways and Means Committee, the Campaign Legal Center joined Democracy 21 in urging the Committee to examine the failure of the IRS to properly enforce the tax laws against groups improperly claiming to be “social welfare” organizations under section 501(c)(4) of the tax code. The nonprofit tax status has been widely abused by groups that have spent hundreds of millions of dollars in the last two election cycles in an attempt to elect or defeat candidates for federal office.

The Ways and Means Committee is scheduled to hold hearings on Tuesday, June 4, 2013 continuing the Committee’s investigation into whether the IRS improperly targeted certain groups for heightened scrutiny as part of their application process for tax exempt status.

The letter sent by the watchdog groups to Chairman Dave Camp (R-MI) and Ranking Member Sander Levin (D-MI), and copied to members of the full committee, called on the committee also to investigate the IRS’s lack of enforcement for groups claiming 501(c)(4) status under the tax code, but that “primarily engage in campaign activities and use their improper claim of “social welfare” status in order to keep secret the donors funding their campaign expenditures.”

“In addition to investigating improper targeting of Mom & Pop conservative groups for additional scrutiny, the Committee must make it clear to the IRS that its ‘see no evil, hear no evil, speak no evil' approach to the big money 501(c)(4) scofflaws is completely unacceptable,” said J. Gerald Hebert, Campaign Legal Center Executive Director. “The Committee needs to make it abundantly clear that the IRS must enforce the laws on the books when it comes to 501(c)(4)s and not retreat back into a shell after chastised publicly before numerous congressional committees. If the IRS continues to do nothing about the groups that spent hundreds of millions of dollars on candidate attack ads last election cycle, those numbers will grow exponentially and in no time we will have hundreds of groups posing as ‘social welfare’ organizations spending billions of dollars trying to determine the winners and losers in our federal elections.”

The Legal Center and Democracy 21 included as attachments their petition for rulemaking to replace flawed IRS rules dealing with 501(c)(4) eligibility and the extensive correspondence with the IRS urging the agency to enforce existing regulations against organizations abusing the privileged tax status in order to hide the donors while running multi-million dollars political advertising campaigns seeking to sway voters in the 2010 and 2012 election cycles.

To read the full letter to the Committee, click here.

To read the earlier correspondence with the IRS, click here.

To read the petition for IRS rulemaking on 501(c)(4) eligibility, click here.