IRS: Watchdogs Question IRS Priority List Which Continues to Ignore Abuse of Tax Laws by 501(c)(4)s for Partisan Politics


The Campaign Legal Center today joined Democracy 21 in sending a letter to the IRS questioning why the agency’s lengthy list of priorities for the coming year does not include any reference to addressing the widespread abuse of privileged 501(c)(4) tax status by organizations that spent hundreds of millions of dollars on attack ads during the 2012 campaign.

“The see no evil ‘enforcement’ stance assumed by the IRS during the 2012 election with regard to 501(c)(4)s was shameful enough but now that the dust has settled the agency’s continued inaction would amount to a gross dereliction of its duties,” said J. Gerald Hebert, Legal Center Executive Director. “The agency must act to clarify its regulations and bring them into line with the laws passed by Congress which they are charged with enforcing. If the agency does not act, and act quickly, the outrageous abuses of the tax laws perpetrated by these shadow party committees masquerading as ‘social welfare’ groups will only grow and spread and further undermine public faith in our democratic process.”  

The Legal Center and Democracy 21 have jointly sent more than a dozen letters to the IRS outlining abuses of 501(c)(4) tax status by organizations like Crossroads GPS, and urging the agency to take action against them and also to initiate a rulemaking proceeding to clarify and bring into compliance with the law the IRS regulations governing campaign activities by groups claiming status as “social welfare” organizations. Today’s letter echoes those calls and requests a meeting with the Acting Commissioner and the Director of the Exempt Organization Division.

In a July 17, 2012 letter to the Legal Center and Democracy 21, the agency announced that it would consider proposed regulatory changes in the area of political activity by 501(c)(4) organizations.

To read the full letter sent today to the IRS, click here.