Tuesday, April 17, 2018

The IRS and Their Interest in 501(c)(4) Organizations with Political Agendas

    In this article, Michael Sorrells discusses why the IRS is so interested in 501 (c)(4) organizations with political agendas. He first explains what a 501(c)(4) organization is and how it differs from charitable organizations. 501(c)(4) organizations are defined as civic leagues or organizations not organized for profit, but operated exclusively for the promotion of social welfare. Some differences between 501(c)(4) organizations and 501(c)(3) charities is that donations to 501(c)(4) organizations are not deductible as charitable contributions, 501(c)(4)s can engage in unlimited lobbying, if the lobbying is not the primary purpose of the organization. 501(c)(4)s can engage in political activity so long as it is not the primary purpose of the organization. He then explains the Citizen’s United case and how after it was decided many 501(c)(4) organizations began to sprout up – raising concerns for the IRS. The IRS was concerned about whether “political activity” was the primary purpose of these organizations and whether the organizations were organized to primarily benefit a private party (such as a political candidate). To learn more about why the IRS is concerned about 501(c)(4) organizations with a political agenda, click here:  https://www.nonprofitaccountingbasics.org/federal-tax-issues/501c4-organizations-irs-little-background-controversy




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