Monday, March 12, 2012

More Coverage of IRS v. 501(c)(4)s

Dan Froomkin at Huffington Post has a detailed story regarding the ongoing dispute between the IRS and Tea Party groups and possibly other organizations claiming tax exemption under Internal Revenue Code section 501(c)(4).  As most readers of this blog know, the IRS concerns almost certainly center around whether these groups are engaging in more candidate-related activity than permitted under that section.  The story highlights the fact that loss of section 501(c)(4), and presumably classification as a section 527 organization instead, could lead to the donors to these groups losing their anonymity.  At the same time, a NY Times editorial applauds the IRS for questioning the claimed 501(c)(4) status, and Senate Democrats are reportedly pushing for even more action by the IRS.  To get a sense of how much money could potential flow through 501(c) organizations during 2012, see the Center for Responsive Politics figures for outside spending in 2010.

By the way, in case anyone wants to see examples of the actual letters that are generating this controversy here is the February 1, 2012 IRS Letter to the Waco Tea Party (courtesy of Fox News).  Similar letters to the Richmond Tea Party have also been posted on Scribd.

Previous Nonprofit Law Prof Blog Coverage:  501(c)(4) Battles Continue (3/6/12); NY Times Editorial - Curb 501(c)(4) Political Entities (1/2/12)

LHM

http://lawprofessors.typepad.com/nonprofit/2012/03/more-coverage-of-irs-v-501c4s.html

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