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Watchdogs Call on IRS to Ignore Partisan Pressure From GOP Senators and Proceed to Consider New Eligibility for 501(c)4s

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Democracy 21 News Release, August 9, 2012, www.democracy21.org
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Watchdog Groups Call on IRS to Ignore Partisan Pressure From Republican Senators and Proceed to Consider New Eligibility Rules for 501(c)(4) Organizations

In a letter sent today to the IRS, Democracy 21, joined by the Campaign Legal Center, called on the agency to ignore the partisan pressures they have received from Republican Senators and proceed to consider new eligibility regulations for section 501(c)(4) "social welfare" organizations.

The letter to the IRS stated:

According to news reports, Senator Orrin Hatch (R-UT) and other Republican Senators have sent a letter to the IRS urging the agency to delay undertaking any effort to revise IRS regulations that govern the extent to which a group eligible for tax-exempt status as a section 501(c)(4) "social welfare" organization can engage in candidate campaign activity.

The letter from the Republican Senators is apparently in response to the letter you sent to our organizations dated July 17, 2012 in which you said you would consider changes in this area.

According to Democracy 21 President Fred Wertheimer:

It appears obvious that Senator Orrin Hatch and his Senate Republican colleagues are attempting to intimidate the IRS into backing away from dealing with the corrupting problem of secret money being laundered into federal elections through section 501(c)(4) tax-exempt organizations. Senator Hatch and his Senate Republican colleagues apparently are acting to protect the secret donors to groups like Crossroads GPS, which is ripping off the tax laws by posing as a "social welfare" organization to keep its donors hidden from the public.

Ironically, Karl Rove, a founder of Crossroads GPS, explicitly confirmed in a Wall Street Journal op-ed last week that more than $50 million in ads run by his group Crossroads GPS are campaign ads intended to damage President Obama and boost Mitt Romney in the 2012 presidential campaign. In an act of hubris, Rove has publicly stripped away the phony claim that his group, Crossroads GPS, is a "social welfare" organization and not a campaign operation.

It is essential that the IRS resist and ignore the partisan pressures from Senator Hatch and his Senate Republican colleagues, or any other partisan pressures, and proceed with a rulemaking to revise the regulations that govern eligibility for 501(c)(4) tax-exempt status. New regulations are essential to stop the widespread abuses of the tax laws that are taking place in order to keep the donors financing their campaign expenditures secret from the American people.

The letter to the IRS from Democracy 21 and the Campaign Legal Center stated:

In your July 17 letter, you acknowledged receipt of our earlier letters to the IRS in which we submitted and then supplemented a petition for rulemaking that challenges as inadequate and contrary to law the existing IRS regulations which set eligibility criteria for section 501(c)(4) tax-exempt status.

As we have noted in a series of letters to the IRS, groups that clearly have an overriding purpose to influence elections are claiming status as "social welfare" organizations in order to keep secret the donors whose funds they are spending to influence the 2012 presidential and congressional elections.

Your July 17 letter to us recognized that the existing regulations in this area were put in place more than a half century ago, that you "are aware of the current public interest" in this matter and that you "will consider proposed changes in this area."

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