Huffington Post: Political Groups Are Flouting IRS Rules To Keep Donors Secret, Reformers Say

-by Dan Froomkin

September 28, 2011- Good-government advocates on Wednesday asked the Internal Revenue Service to investigate four groups they say are blatantly flouting the law by claiming tax-exempt status as "social welfare" groups when they are in fact overtly political organizations.

The so-called c4 designation, in addition to exempting organizations from taxes, also allows groups to keep their donors secret — even while accepting unlimited funds.

The Wednesday letter, sent by Democracy 21 and the Campaign Legal Center, represents the latest of many attempts by reformers to rein in the extraordinary growth of c4 groups, which in the 2010 election cycle began flooding the political landscape with massive amounts of money from people or organizations who for whatever reason didn't want their political involvement to be made public.

The letter called out one liberal group (Priorities USA), two conservative groups (Crossroads GPS and American Action Network) and a pro-third-party group (Americans Elect) for making specious claims — such as that as long as they only spend 49 percent or less of their total expenditures on explicitly campaign-related activity, they can still qualify as "social welfare" groups.

"Court decisions have established that in order to meet this requirement, section 501(c)(4) organizations cannot engage in more than an insubstantial amount of any non-social welfare activity, such as directly or indirectly participating or intervening in elections," the letter read.

The same reformers had previously asked the IRS to investigate Crossroads GPS, a group affiliated with Karl Rove.

Democracy 21 president Fred Wertheimer said the four groups were chosen this time around because "we had very significant public information about them." The letter summarized numerous news reports that describe their openly political agendas.

FULL STORY HERE:



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