Senate Democrats are asking the Internal Revenue Service to restrict the amount of money a tax-exempt organization can spend on political activities, warning that they will introduce legislation doing so if the tax enforcement agency fails to act soon.
At issue are groups that claim 501(c)4 tax-exempt status by saying they engage exclusively in “social welfare” activities but spend a considerable amount of time and money on political advertising and advocacy. Such groups, including Crossroads GPS and Priorities USA are bankrolling multimillion dollar advertising campaigns designed to provide additional firepower for Republican and Democratic candidates.
In a letter sent Monday to IRS Commissioner Douglas H. Shulman, seven Democratic senators ask the agency to establish “a bright line test” to determine the primary purpose of such groups and urges the IRS more clearly define how much time and money can be spent on political activities versus general political matters.
“We urge the IRS to take these steps immediately to prevent abuse of the tax code by political groups focused on federal election activities,” the senators wrote in their letter, adding that “if the IRS is unable to issue administrative guidance in this area then we plan to introduce legislation to accomplish these important changes.”
The letter was cosigned by Sens. Charles E. Schumer (D-N.Y.), Michael Bennet (D-Colo.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.) and Al Franken (D-Minn.). Of the seven, only Whitehouse faces reelection this year, meaning the others are unlikely to face advertising or outreach efforts organized by Super PACs.
The senators also suggest that tax-exempt organizations should be required to document the exact percentage of their “social welfare” undertakings on their 990 IRS form. “Organizations should be required to ‘show their math’ to demonstrate that political election activities and other statutorily limited or prohibited activities do not violate the ‘primary purpose’ regulation” for tax-exempt groups, the senators wrote.
The IRS is probing dozens of political groups that have been established in recent years, most recently pressing dozens of tea party-affiliated organizations for information on their activities.
In response to the Democratic request, Sen. Orrin Hatch (R-Utah) said Monday that the IRS should keep politics out of its decisions on which groups to investigate and called the timing of the request “suspect.”
“Sending the IRS on a politically-motivated witch hunt is simply unacceptable and could have a chilling impact on the constitutionally-protected right to free speech,” Hatch said in response to the Democratic letter. “I expect the IRS not to succumb to this type of political posturing.”
Though most time and attention has focused on Super PACs attempting to sway the opinions of Republican presidential primary voters, several such groups are devoted to assisting congressional Democrats and Republicans maintain or build upon their majorities in the House and the Senate.
But another group, the Campaign for Primary Accountability, is backing challengers to long-serving congressional incumbents of both parties in several congressional primaries this year.
This story has been updated.
Follow Ed O’Keefe on Twitter: @edatpost
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