IRS may be unfairly targeting Tea Party C4 orgs.

The IRS is taking aim at political groups that claim tax exempt status and funnel donations into political attack ads. There is growing concern that a number of organizations may be abusing their 501(c)4 status. Likewise, there are allegations that the IRS is unfairly targeting groups opposed to Obama's policies.

WASHINGTON, DC (Catholic Online) - The 501(c)4 status is reserved for organizations whose exclusive purpose is to promote social welfare. And while the term could be generously defined to include some political activity, it does not permit exclusive political activity. The designation is different from the one used to incorporate and protect Super PACs (Section 527). 

Unlike Super PACs, where the names of donors are public, donations to 501(c)4 organizations are protected with donors allowed to keep their names and donations private. However, if the IRS finds that an organization has abused its status, it could fine the organization 35 percent or more of its secretly raised money and make the donor's names public.

The mere threat is expected to have a chilling effect on donations to such organizations. 

The issue is of particular concern because a growing number of c4 organizations are getting involved in the particularly divisive - and decisive 2012 election cycle. 

In February, several Democratic senators sent a letter to the IRS asking them to investigate c4s. "It is contrary to the letter and spirit of the statute for political organizations formed primarily to advocate for a political candidate to run attack ads against other candidates to take advantage of section 501(c)(4)," the letter read. 

Democratic Senator, Tom Udall (D-NM) said "The term 'social welfare organization' is clearly being used loosely these days." He continued, "voters deserve to know who's behind the attack ads they see on TV and we need a multi-pronged approach to get there - a tightening of regulations, disclosure legislation from Congress, and ultimately, a constitutional amendment to reduce the influence of money in our elections." 

While many welcome IRS enforcement of the tax code, some are crying foul. It's difficult to ignore their cries, because the Tea Party seems especially targeted in the IRS probe. The American Center for Law and Justice (ACLJ) has blasted the current IRS effort as an attempt to silence several conservative organizations in an election year.

Jay Sekulow, chief counsel or the ACLJ explained, "The problem here is the IRS has gone beyond legitimate inquiries and is demanding that these organizations answer questions that actually violate the First Amendment rights of our clients."

However, if the IRS is targeting some organizations unfairly, on the basis of their possible political intent, then it would hint at corruption within the current administration and an organization that is supposed to enforce the law without bias - which would be a scandal in itself.

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Still, the IRS is within its rights, and duty, to investigate any claims of financial wrongdoing.
So far, the IRS has only sent inquiries to several c4 organizations to determine if further investigation is warranted. No accusations of wrongdoing have actually been made.

If preliminary IRS investigation does find evidence of wrongdoing, then a detailed investigation will likely result. What consequences this could have on organizations and the election as a whole remains unknown, but it appears likely that the investigations will prompt a number of changes both for c4s and the law. 

Needless to say, c4s and the IRS itself, will face close scrutiny as the investigations proceed. 

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