Tag Archives: IRS

IRS Announces Major Change To Nonprofit Donor Disclosure Requirements

In a significant and unexpected development, the U.S. Treasury Department announced yesterday that certain nonprofits — including trade associations and 501(c)(4) social welfare organizations — would no longer be required to disclose the names and addresses of their donors on the annual “Form 990” they file with the Internal Revenue Service. Although the IRS already … Continue Reading

Political Law Potpourri—The Consolidated Appropriations Act of 2018

While the din over a possible government shutdown dominated the headlines, political law played a supporting role in the recently enacted Consolidated Appropriations Act (Pub. L. No. 115-141).  The content and omissions of the so-called “Omnibus” spending bill will be of interest to political actors in all sectors, but particularly those operating nonprofit entities engaged … Continue Reading

IRS Steps into Fray on Political Activities

The Internal Revenue Service (IRS) recently issued two private letter rulings (PLRs) that may be interesting for tax-exempt organizations that engage in political activity. In the first ruling, the IRS held that a company could not deduct payments made to charity under a PAC matching contribution program as an “ordinary and necessary business expense.”  While … Continue Reading

UPDATE: 501(c)(4) Organizations Not Required To Provide Notice Until Treasury Issues Regulations

Under a new law, each 501(c)(4) organization will have to notify the IRS of the intent to operate as a 501(c)(4) organization; however, such notice will not be due until at least 60 days after regulations are issued implementing the notification procedures. As reported in Inside Political Law on December 22, 2015, The Protecting Americans … Continue Reading

PATH Act Requires 501(c)(4) Organizations To Provide Notice To IRS After Formation

Under recent legislation, newly-created and certain existing 501(c)(4) social welfare organizations must file a notice with the IRS.  In the past, social welfare organizations were not required to submit an application (Form 1024) to the IRS to be recognized as a tax-exempt organization but could “self-declare” exempt status, as long as the organization operated pursuant … Continue Reading

Congressional Spending Bill Shuts Down Key Goals of Campaign Finance Reform Community

A major spending bill posted late last night by Congressional leaders contains provisions shooting down two key initiatives of the campaign finance reform community.  Stymied by a Federal Election Commission that has increasingly struggled to find consensus, campaign finance activists in recent years have turned their attention to other federal regulators, pressing those regulators to … Continue Reading

Conflicting Signals on Finalizing the Proposed Treasury Regulations for 501(c)(4)s

Earlier today, IRS Commissioner John Koskinen, in his first appearance before the House Appropriations subcommittee on Financial Services and General Government Oversight, stated that final regulations governing political activity by 501(c)(4) social welfare organizations are unlikely to be completed before the November elections. His statement seems to differ from the White House Statement of Administration … Continue Reading

Proposed IRS Regulations for 501(c)(4)s: Sooner Than Expected, But Probably Too Late

Yesterday evening the Treasury and the IRS released, sooner than expected, proposed regulations that could fundamentally change the playing field for 501(c)(4) organizations active in politics.  The proposed regulations will be published in the Federal Register on Friday, November 29.  The pre-publication version is here. Highlights The proposed regulations mirror the approach first taken by … Continue Reading

OPEN Sesame or a Potemkin Village?

Twenty House Democrats yesterday introduced proposed legislation that, if enacted in its current form, would amend the Federal Election Campaign Act of 1971 to: Require corporations and labor unions which “submit[] regular, periodic reports” to their shareholders and members to include certain detailed information concerning their political spending.  That information must also be reported to the … Continue Reading

Charting a Path Forward for Certain 501(c)(4) Organizations, and Perhaps Others

The IRS on Tuesday issued its eagerly anticipated 30-day report summarizing its initial review and assessment of “what went wrong” in connection with the IRS’s use of inappropriate criteria to screen exemption applications from Tea Party groups seeking recognition that they are 501(c)(4) social welfare organizations.  We had previously blogged on this here and here. … Continue Reading

Group Sues Treasury and IRS to Amend 501(c)(4) Regulations

All eyes are on the IRS and its regulation of 501(c)(4) organizations these days, with the agency’s mishandling of exemption applications, the release of the Treasury Inspector General’s report, and the lengthy hearings held by the House Ways and Means Committee, the Senate Finance Committee, and the House Oversight and Government Reform Committee examining the … Continue Reading

Treasury Inspector General to IRS: Yes, That Was Wrong

Late yesterday afternoon, the Treasury Inspector General for Tax Administration released its eagerly awaited report on its investigation into the IRS’s use of inappropriate criteria for screening tax-exempt applications (“IG Report”). The Inspector General initiated its investigation after members of Congress raised concerns during the 2012 election cycle that the IRS was selectively enforcing the … Continue Reading

IRS Says: “That was wrong.”

“That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review.” In an unexpected move that surprised some and angered others, Lois Lerner, Director of Exempt Organizations of the Internal Revenue Service, publicly apologized for the IRS’s mishandling of exemption applications … Continue Reading

Senate Judiciary Committee Holds Campaign Finance Enforcement Hearing

This morning the Senate Judiciary Committee Subcommittee on Crime and Terrorism held a hearing on “Current Issues in Campaign Finance Law Enforcement.”  The focus of the hearing was what the Department of Justice and Internal Revenue Service are doing to enforce campaign finance law violations post-Citizens United with respect to contributions to Super PACs and … Continue Reading

Levin Warns of Congressional Investigation Concerning Undisclosed Money in Elections

In a press statement yesterday announcing that he would not run for re-election to the Senate in 2014, Senator Carl Levin (D-MI) foreshadowed a new investigation by the Senate Permanent Subcommittee on Investigations (“PSI”) concerning what he described as the IRS’s “failure” to police the use of undisclosed political money by tax-exempt organizations.  As the … Continue Reading

‘Tis the Season!

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 … Continue Reading

IRS to Senator Levin: IRS Conducting Over 70 Audits of 501(c)(4) Organizations

In a floor statement yesterday, Senator Carl Levin, Chairman of the Permanent Subcommittee on Investigations for the Committee on Homeland Security and Government Affairs, blasted the IRS for allowing 501(c)(4) organizations to “exploit” the tax code and spend millions on political campaign activity.  In connection with his statement, the Senator released four letters between Senator … Continue Reading

Congressional Research Service Concludes that the Federal Gift Tax Should Apply To Contributions to 501(c)(4) Social Welfare Organizations

The Congressional Research Service has issued a report analyzing whether the federal gift tax applies to contributions made to 501(c)(4) organizations.  Many years ago, the IRS took the position in rulings that the gift tax applied.  However, the IRS had not enforced the tax for over 20 years until 2011, when the IRS audited five … Continue Reading

Checkmate!

Yesterday, 10 Republican members of the U.S. Senate, led by Senator Orrin Hatch, wrote to the IRS and urged it to resist calls to limit the amount of political activity that 501(c)(4) social welfare organizations are permitted to engage in under a Treasury Regulation that has been in effect for 52 years.  Yesterday’s letter follows … Continue Reading

The IRS and 501(c)(4) Groups: Change May Come, But Not Quickly Enough For Some

In an exchange of letters released Monday by Democracy 21 and the Campaign Legal Center, the IRS has stated that it will consider changes in the rules relating to political activity by 501(c)(4) organizations as it works to identify tax issues that should be addressed through regulations or other published guidance.  The IRS letter can be … Continue Reading
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