Congressional conservatives now have another issue to attack the Obama administration, which in many respects they created. Recently, the inspector general of IRS reported that the agency was focusing too much on Tea Party and related conservative groups in enforcing 501(c)(4) rules. What are the 501 statutes? They were initially passed in 1913 as part of the Tariff Act to encourage the creation of tax-exempt groups that promote the general welfare of local communities. Over the years, many have been created like the: Elks Club, Chamber of Commerce, Kiwanis, police fraternities along with recreation and education groups. Theyre allowed to have some political messages but were generally limited to less than 50 percent of their activity.
With the 2010 Citizens United decision by the Supreme Court, the opportunity for unlimited political contributions by corporations or any organization became possible. Immediately Super PACs were formed to do this. The only problem was, these PACs required the identification of the donors. Some clever people then began searching for another way to accomplish this mission (of not identifying donors) and came upon 501(c)(4) of the tax code.
All of a sudden the IRS was flooded with requests to set up these tax-exempt groups. For the 2012 election, about $263 million was spent by conservative 501(c)(4) tax-exempt political groups and only around $35 million by liberal groups. So when there was nearly an eight to one ratio of conservative verses liberal outlay of political cash to support political views, who is the IRS going to focus on?
In my view, these tax-exempt statutes were never set up for political action committees, and should be disallowed by anyone. Why should I subsidize a group with a tax break, when I disagree with their message?