501c4s. Obama: You Can FIX This Mess With An Executive Order TONIGHT.
As most of you know, the Revenue Act of 1913 gives tax exempt status (AND donor anonymity) to 501c4 groups that are engaged exclusively in charity, educational or recreational activities. Political organizations are separately listed under 527, and are not given tax exempt status.
26 U.S.C. § 501(c)(4)(A)
Civil leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
In 1959 The IRS UNILATERALLY changed the interpretation to the following, DEPARTING from the LAW!
Treas. Reg. § 1.501(c)(4)-1(a)(2)(i)
[a]n organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community. An organization embraced within this section is one which is operated primarily for the purpose of bringing about civic betterments and social improvements.
This opened the floodgates for political organizations to masquerade as charities, while spending 49% of their money on political campaigns.
SIMPLE SOLUTION: OBAMA ISSUES AN EXECUTIVE ORDER, ORDERING THE TREASURY (and IRS) TO STRICTLY ADHERE TO THE WORDS OF THE ACT. 501c4s cannot spend ANY of their money on politics.
CASE CLOSED!
(Although, as a partisan I'd advise Obama to wait until, say...OCTOBER 2014 to issue that order. Let the Koch's dump another $300 000 000 into CROSSROADS GPS, only to suddenly have the door slammed in their face when Rove is forbidden to spend any of it in the election campaign. Too bad, so sad.)
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