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.
