When the 2017 tax reform bill passed, it included a provision that imposed an excise tax on compensation above $1 million for certain kinds of entities—including political action committees (PACs)—even if paid by the connected organization and not the PAC itself. Some companies feared that having senior executives provide services to the PAC could trigger
Down But Not Out: IRS Cites Political Activity in Denying Groups Tax-Exempt Status
The IRS recently denied tax-exempt status to two organizations based on their political activities. The two groups – whose names have been redacted from letters released by the agency – sought tax-exempt status under Section 501(c)(4), which is reserved for “social welfare” groups whose primary purpose is to benefit the general community.
Controversy has been
501(c)(4) Proposed Regulations—An Unsafe Harbor
On November 26, the Department of Treasury released proposed regulations billed as “more definitive rules” for when the IRS will treat certain activities by section 501(c)(4) organization as political activity. It is hard to argue that the proposal provides some clarity, but only by classifying a wide variety of activities as candidate-related and therefore not
501(c)(4)s: Why all the fuss?
Obviously the IRS has spent a great deal of time trying to determine whether certain groups qualify for exemption under Section 501(c)(4) of the tax code. Why 501(c)(4) status matters so much is really about disclosure and not about tax revenue at all.
Unlike contributions to Section 501(c)(3) organizations, contributions to 501(c)(4)s are not deductible
Lessons Learned: How to Take 5 Successfully (or Not)
Last week, Lois Lerner, the now suspended Director of Exempt Organizations for the IRS, appeared before the House Oversight Committee. She gave a brief opening statement, in which she proclaimed that she had “not done nothing wrong” and that she had “not broken any laws.”
Her lawyer had already informed the Committee that she would
IRS Fallout Continues: Where are we now?
It’s been less than three weeks since the IRS admitted to targeting applications for tax-exempt status filed by some conservative organizations. Much has happened since then on both the personnel front and with congressional oversight hearings.
On the personnel front, the acting IRS commissioner (Steven Miller) resigned and the President named a new acting commissioner.
The Current IRS Firestorm over Conservative Political Nonprofits: Any Lessons for the Rest of the Tax-Exempt Community?
On May 10, 2013, the nonprofit tax bar – and much of the country – was rocked by reports that Lois Lerner, director of the Internal Revenue Service’s Exempt Organizations Division apologized for the Service’s inappropriate flagging of conservative political groups for additional review during the 2012 election season. She made this apology in response
Senate Hearing Illustrates Gridlock at Federal Level in Forcing Donor Disclosure; Utah is Latest State to Charge into the Vacuum
What happens when a donor sets up a corporation and uses it to contribute to a Super PAC, intending to hide his or her identity by having the corporation make the contribution? What about when a nonprofit social welfare organization, commonly called a 501(c)(4) organization, appears to spend millions on political ads but then reports
Senator Levin to Pursue 501(c)(4)s Engaged in Campaign Activity
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
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