IRS Proposes New Guidelines for Political Non-Profits
Tax exemption for mainly political groups and PACS is tiresome and wrong.
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.
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