As we reported last week, millionaire-funded and operative-helmed attack groups looking to make a splash in the elections this year are choosing nonprofits as their preferred vehicle. Acting as 501(c)(4) organizations, the groups are allowed to attack all they want and keep their donors secret.
There’s a catch, of course. The groups are nominally “social welfare” organizations, groups that are allowed to engage in political activity as long as that is not its primary purpose. That’s why you see all the groups claim that they are focused on issues, not candidates, even when it’s apparent that’s not the case.
It’s a hazy line, and one that the groups hope that the IRS doesn’t explore. But as Roll Call reported yesterday, the IRS says it’s taking a “close look” at whether the groups go too far.
But don’t expect the IRS to step in any time soon. The IRS official tells the paper that the IRS likely wouldn’t act until after the groups filed their taxes next year (by which time, of course, a president might be in the White House due in large part to a campaign by a lawbreaking group). And what happens then? Well, it’s unclear:
The IRS director also agreed that — perhaps unlike the FEC — a broad IRS sweep of wayward nonprofits may yield better results than the recent high-profile fining of 527s by election regulators. And although the IRS is likely to just revoke a group’s tax status and slap it with a fine, another source within the IRS said that serious violators could “go through our criminal investigations area … and it could end up at the Justice Department.”