Like the men and women in red suits ringing bells on street corners, press reports are springing up everywhere alleging that numerous 501(c)(4) social welfare groups—including groups on both sides of the aisle—have violated their tax-exempt status by spending too much time and money on political campaign activities during the recent campaigns.
For any such organizations that have the calendar year as their tax year, there is still time to balance the scales before the end of 2012 by investing heavily in social welfare activity, such as by lobbying on matters germane to their tax exemption.
For those organizations, the recent decision announced by Rep. Eric Cantor (R-Va) that the U.S. House of Representatives will not adjourn “until a credible solution to the fiscal cliff has been found” should come as a welcome holiday gift. Such organizations now have additional time to spend those social welfare dollars.
Organizations with fiscal years other than the calendar year will not necessarily need to move as quickly—they will have until the end of their fiscal years to “balance” the books.