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August 27, 2010
NY Times: "Conservative Group Accused of Abusing Tax Status"
The New York Times reports today that lawyers for the Democratic Congressional Campaign Committee have filed a complaint with the IRS targeting the Americans for Prosperity Foundation. The copy of the complaint that accompanies this story alleges that the Foundation is a section 501(c)(3) organization that violated the prohibition on political campaign intervention by spending over half a million dollars on ads in four congressional districts that were timed to support the political ads of the Foundation's section 501(c)(4) affiliate, Americans for Prosperity. The complaint further alleges that the Foundation is also an "action organization" in that its goals are only achievable through legislation and so also for that reason the Foundation is disqualified from section 501(c)(3) status. For an excellent analysis of the complaint, see Ellen Aprill's guest post on Election Law blog.
(Hat tip: Election Law blog)
This story follows a Washington Post blog post yesterday regarding the planned activities of these two entities - including a $4.1 million ad campaign by the Foundation apparently targeting 24 competitive House seats in 11 states - and a New Yorker article this week on the co-founder of these groups, billionaire David Koch, and his brother, Charles Koch.
This complaint is, of course, only the latest and undoubtedly not the last complaint relating to alleged violations of either the section 501(c)(3) prohibition on political campaign intervention or the limitations on such activity under section 501(c)(4), 501(c)(5), and 501(c)(6). Whether the IRS is up to vigorously investigating and, where necessary, prosecuting such violations is uncertain, however. It has yet to release a long-expected report on its 2008 political activity enforcement efforts, and, unlike in other recent federal election years, it has yet to announce a new round of such enforcement activity for this year. See the IRS Political Campaign Intervention by 501(c)(3) Tax-Exempt Organizations website. To date it also appears not to have challenged any of the churches where pastors spoke in favor of candidates from the pulpit during "Pulpit Freedom Sundays" held in 2008 and 2009. See the Alliance Defense Fund's Pulpit Initiative website.
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