IRS Considers Reevaluating Politically Minded 501(c)(4) Orgs

July 25, 2012 Posted by The Law Firm for Non-Profits, P.C. in Advocacy, IRS, News, Policy

As we posted here and here, advocates for campaign finance reform have been demanding for the past year that the IRS investigate politically motivated “social welfare” or 501(c)(4) organizations.

These calls to action have finally paid off. Lois Lerner, the director of the IRS Exempt Organizations Unit, stated last week that the “IRS is aware of the current public interest in this issue . . . [and] will consider proposed changes in this area.” Ms. Lerner also stated that her office would work with the “IRS Office of Chief Counsel and the Treasury Department’s Office of Tax Policy to identify tax issues that should be addressed through regulations and published guidance.”

This letter serves as the first time the IRS has indicated that it would consider new rules for 501(c)(4) organizations (which date back to 1959). We will keep you posted as the IRS provides more information on this review.

In the meantime, the news media has reported that the IRS is considering the exemption applications for several such groups, including Crossroads GPS and Americans Elect. But even if the IRS does change the rules, nothing meaningful will result before November’s general election.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607


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