Watchdog Groups Urge Ways and Means Committee to Investigate Failure of IRS to Enforce the Tax Laws Against 501(c)(4) Abusers
In a letter sent today to the House Ways and Means Committee, Democracy 21, joined by the Campaign Legal Center, urged the Committee to examine the failure of the IRS to properly enforce the tax laws against groups improperly claiming to be “social welfare” organizations under section 501(c)(4) of the tax code in order to hide their donors. The non-profit tax status has been widely abused by groups that have spent hundreds of millions of dollars in the last two election cycles in an attempt to elect or defeat candidates from federal office.
The Ways and Means Committee is scheduled to hold hearings on Tuesday, June 4, 2013, continuing the Committee’s investigation into whether the IRS improperly targeted certain groups for heightened scrutiny as part of their application process for tax exempt status.
The letter sent by the watchdog groups to Chairman Dave Camp (D-MI) and Ranking Member Sander Levin (D-MI), and copied to members of the full committee, called on the committee to also investigate the IRS’s lack of enforcement for groups claiming 501(c)(4) status under the tax code, but that “primarily engage in campaign activities and use their improper claim of “social welfare” status in order to keep secret the donors funding their campaign expenditures.”
According to Democracy 21 President Fred Wertheimer:
The House Ways and Means Committee has a dual responsibility in looking at the enforcement problems at the Internal Revenue Service. The Ways and Means Committee, in conducting hearings on improper targeting practices, must not ignore the failure of the IRS to take steps to prevent groups from abusing the tax laws by improperly claiming 501(c)(4) tax-exempt status.
To focus only on the targeting of Tea Party and conservative groups and ignore potential major abuses in which pro-Republican groups played an important role, would call into serious question the fairness of the Committee hearings and whether the Committee is really interested in getting to the bottom of the enforcement problems at the IRS.
We strongly urge the Ways and Means Committee to examine the 15 letters Democracy 21 and the Campaign Legal Center sent to the IRS beginning in October 2010 requesting investigations of a number of groups and petitioning for a rulemaking to replace the flawed IRS rules dealing with eligibility for 501(c)(4) tax-exempt status. We urge the Committee to include in its hearings an examination of the ways in which the tax laws have been abused in the last two elections by groups improperly claiming 501(c)(4) tax-status to keep secret from the American people the donors financing their campaign operations.