In the recent press release announcing his retirement, Senator Carl Levin announced that he will use his last two years running the Permanent Subcommittee on Investigations (“PSI”) to “encourage” the IRS to provide aggressive oversight of tax-exempt groups that are primarily engaged in politics. The prospect of hearings could potentially expose the inner workings of
Tax-Exempt Status
California High Court Orders Nonprofit to Release Donor Records to State Watchdog
Americans for Responsible Leadership (“ARL”), a Phoenix-based nonprofit organization, disclosed its donors today in response to a ruling late yesterday from California’s highest court. The suit to enforce a new California disclosure regulation was filed by the state’s Fair Political Practices Commission (“FPPC”). According to the FPPC, the contribution was funneled to ARL from two…
A Battle Over Who Regulates 501(c)(4)s
New York Attorney General Eric Schneiderman has reportedly been investigating 501(c)(4) organizations that have been involved in political activities. According to the New York Times, his office has sent letters to nearly two dozen groups seeking information about their activities. The exact aim of this investigation is not clear, but commentators have suggested that it…
States Ramp Up Disclosure Rules for Political Spending; Federal Efforts Stall
Outside groups have become a potent political force in the 2012 election campaign. Unleashed by the Supreme Court ruling in the Citizens United case and subsequent lower court rulings, such groups can raise unlimited sums from individuals and corporations for ads and other spending that is not “coordinated” with a candidate. The most dramatic example:…
IRS Unlikely to Move on Political Activity by 501(c)(4)’s Until After Election
Tax-exempt groups known as 501(c)(4)’s have become a potent force in the 2012 election, eclipsing Super PACs as the vehicle of choice for many corporations and individuals because 501(c)(4)’s do not have to disclose their donors. Amid growing controversy about whether some 501(c)(4)’s are engaged in more extensive election-related activity than the law allows or…
Another One Bites the Dust: IRS Continues Focus on 501(c)(4) Political Activity
Close on the heels of a revocation we noted in a recent post comes yet another IRS ruling revoking 501(c)(4) status of a politically-active organization. In Private Letter Ruling 201224034, the IRS concluded that the organization was primarily benefiting the personal political and policy interests of the organization’s founder.
The ruling does not directly…
IRS Says Training Candidates Not (c)(4) Activity: Are There Broader Implications Here?
The IRS recently revoked the 501(c)(4) status of an organization that identifies and trains potential candidates for one of the political parties. In doing so, the IRS borrowed a restriction from the law governing 501(c)(3)s, which requires such groups to serve a public rather than a private interest. There are reasons to doubt whether this…