IRS: Crossroads GPS, Americans Elect, Other Groups Continue to Abuse Tax Laws to Shield Donors: Campaign Legal Center & Democracy 21 Provide Further Evidence and Urge IRS Action

The Campaign Legal Center and Democracy 21 today provided additional materials to the Internal Revenue Service (IRS), supplementing previous submissions regarding several controversial organizations that appear to be in clear violation of their tax status as 501(c)(4) “social welfare” organizations.  Today’s letter to the IRS backs up an earlier request that the agency investigate Crossroads GPS, the American Action Network, Americans Elect and Priorities USA.

“These organizations have chosen to file for special tax status seemingly for no other purpose than to hide the identities of their donors while pursuing blatantly political agendas,” said J. Gerald Hebert, Executive Director of the Campaign Legal Center.  “The IRS must step up and do its job by curbing these abuses and enforcing the laws on the books.  It defies belief that an organization tries to claim it is a ‘social welfare’ organization while boasting to reporters that it is running ads against a candidate in an attempt to scare him out of seeking reelection and seemingly dedicating itself entirely to candidate-election related activities.”

The Internal Revenue Code does not require section 501(c)(4) tax-exempt organizations to disclose their donors to the public, but does require such organizations to engage primarily in the promotion of social welfare.  As today’s letter points out, “Federal court decisions have established that in order to meet this requirement, section 501(c)(4) organizations cannot engage in more than aninsubstantial amount of any non-social welfare activity, such as directly or indirectly participating or intervening in elections.” 

Democracy 21 took the lead in preparing the IRS letter.  To read the full letter, click here. To read the earlier letter to the IRS, click here.