Tag Archives: 501c4

The IRS is Flopping on Election 2016

130514_irs_building_ap_605New Orleans      Sometimes you just have to pinch yourself when you’re reading the daily papers because what you’re reading is so unbelievable. Today’s interplanetary, Ripley’s Believe-it-or-Not set of stories features the USA’s Internal Revenue Service, the IRS, or the Service, as they call themselves, and the fact that they pretty clearly are flopping on the coming 2016 presidential election and deciding to let the pols pretty much do whatever they want, whatever way they want, and look the other way. Are you kidding me?!?

Ok, we all know that money has flooded politics and pushed the biscuit cookers, little people, and regular Joe’s to the margin. The currently trending Supreme Court did that, too, remember with Citizens’ United opening the floodgates to the Kochs and every other two-bit billionaire who wanted to buy, rent, or own a politician or party. Comedians famously organized their own super-PACs last election in protest of the money floating those supertankers of political influence.

What I do not think we had fully realized is that the IRS was going to just rollover and look the other way on all of this mess. Who do they think they are? The Federal Election Commission or something?

Not merely satisfied with super-PACS, although almost all of the candidates are still taking the PAC-crack, many are aligning themselves with tax exempt bodies formed as 501c4 formations, ostensibly classified as exempt from taxes because they are devoted to “social welfare.” In this case the welfare seems to be favored presidential candidates. They do not have to divulge their donors and many are clear that they have no intentions to do so by damn. Furthermore, though they are technically not supposed to coordinate with candidates and their campaigns, many share staff, board members, and, reportedly, extensive coordination and division of responsibilities with the candidates in that wonderful period when they stalked the country and the corporate suites without formally declaring the obvious fact that they were running for president. One such outfit, the Conservative Solutions Project, tied to Senator Marco Rubio has raised almost $16 million according to reports, more than many other candidates. Not surprisingly they have taken over some of the polling, analysis, research, and advertising that would normally have been done by the candidates own campaign. Come on now!

The IRS seems too buffaloed to bother, the people can go to the devil. They are not going to issue regulations on what is allowable political activity and expenditure until after the 2016 election when the cows are way past the barn, and maybe they will have already elected a cowboy president who will think all of this is dandy. Unbelievable!

Meanwhile on the home front we’re supposed to jump up and salute every April 15th and stand at attention with chills running down our spine every time we get a letter from the IRS. Don’t tell me that’s never happened to you!

Clearly there’s a solution. We need to reincorporate ourselves as 501c4’s and tell the IRS next time they ask that we’re going to do whatever we darned please just like all of the candidates for President. So there!


Please enjoy Rickie Lee Jones’ Jimmy Choos. Thanks to KABF.


IRS Tax Exemption Hullabaloo

501c3 501c4London   A record number of comments, 23,000 and counting, have now been filed with the Internal Revenue Service, over proposed new rules affecting tax exempt nonprofits, particularly organizations with a c4 status, but even potentially c5’s which are labor unions and c6’s which are trade associations.  When you hear IRS and tax exemptions, the first thing that may come to your mind is the dust-up some months ago when it was revealed that applications from the Tea people and some progressive organizations both received an extra hairy eyeball review from the Service about whether they were really social welfare outfits or simply wolves in sheep’s clothing.  The real problems though are much deeper than that controversy and instead go squarely to the Supreme Court’s even wider opening of the floodgates for mass volumes of money coming into politics with the Citizen United decision and the quickness of Karl Rove, the Koch Brothers, and others to drive trucks through the new loopholes while disguising the drivers or donors at the same time.

            Now the IRS finally is coming to grips with the mess of fake c4’s and everyone seems to be yammering and whining about the proposals.   The heart of the problem is what defines “political campaign,” and where the IRS seems to have thrown the baby out with the bathwater is in broadly mashing traditional nonprofit civic engagement with hard core partisan campaigning.  The IRS rule seems to include voter registration drives, get-out-the-vote efforts, candidate debates and forums, voter guides, and a whole bunch of stuff that has been simple and straightforward for years from groups ranging from the League of Women Voters to neighborhood civic organizations.  Something this broad seems to be trying to fix a lot more than was broken.  Adding on restrictions to unions and even the Chamber of Commerce, just seems grasping, and I bet at least those items will die on the drawing board.

            Nonetheless, it’s hard to go to the barricades to defend c4’s in my view.   It’s always been a “partially pregnant” tax status.  It’s not a c3, which is the most favorable status for nonprofits and clearly lines such an organization with the angels in doing educational and charitable work, but somewhere betwixt and between.   In my years with ACORN for example, we never had any c4’s.   ACORN was a plain vanilla nonprofit, and didn’t need a special tax exemption to do the work we were doing or to embrace restrictions on our membership for limited and questionable advantages.  More recently c4’s have become the rage though and many of the former ACORN state affiliates seem to have reorganized as c4’s rather than simply as nonprofits.   I would have thought it tied hands, and now it seems the IRS is caught in this latest firestorm, because it is trying to do exactly what they probably should do, which is tie hands, especially given the abuse of the c4 status by the Koch Brothers and their imitators. 

            The head of the IRS says they are in no hurry to solve this problem, but the genie is out of the bottle and being a c4 is going to become a lot harder, more expensive, and immensely trickier.  Being either a c3 or a simple nonprofit may not be fancy or the fad for the lawyers, but for organizers, it’s still the way to go for my money.