Don’t Expect IRS to Challenge Nonprofits linked to Conservative Candidates in 2016 Election

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July 5, 2015; New York Times

In Sunday’s New York Times, Eric Lightblau suggests that the IRS should not be expected to contain political spending through nonprofits during the 2016 election, and especially not conservative spending. Not only is the IRS underfunded, he writes, but they will also be unwilling to step into the climate of deep suspicion that persists two years after charges that the agency targeted conservative groups applying for tax-exempt status.

Lightblau reports that at least eight Republican presidential candidates, including Jeb Bush and Sen. Marco Rubio of Florida, have relationships with nonprofit groups set up to raise hundreds of millions of dollars. Hillary Clinton’s supporters are reported to be considering the same course. Such groups, of course, are not obliged to disclose their donors.

“It’s ‘anything goes’ for the next couple of years,” said Paul Streckfus, a former nonprofit specialist at the IRS, talking about the 501(c)(4)s. “The whole system has really collapsed.”

Audits for electoral campaigns are extremely rare, and complaints languish in the best of times, but an overstretched IRS in a touchy, suspicious political environment is unlikely to move quickly, and electoral candidates may see that as a major opportunity to increase the role of 501(c)(4)s in the coming election.

While there are clear distinctions for much of the sector between (c)(3)s and (c)(4)s and between advocacy and electioneering, the general public, when faced with reports of massive political spending through (c)(4)s, will only hear “nonprofit.” This will encourage the public to think of nonprofits as a sector full of unaccountable activity. Beyond the damage done to the democratic process, this situation will do damage to nonprofits, particularly those engaged in legitimate advocacy activities.—Ruth McCambridge

 

  • It’s important to remember that the IRS has already attempted to issue new regulations on 501(c)(4)s and political activity. See https://nonprofitquarterly.org/2015/05/27/is-the-irs-finally-ready-to-regulate-nonprofit-political-activity/ and articles hyperlinked within that article.

    In issuing its proposed regulations in late 2014, the IRS managed to unite left and right, reformers and stalwarts, in opposition to what it had written. The IRS ignored other classes of nonprofits in its focus on 501(c)(4)s. It also would have made illegal various advocacy practices that both conservative and liberal nonprofits have pursued without controversy for decades.

    As the linked article says, even if the IRS had the resources and will to re-issue the proposed regs, and even if the IRS “got it right” (whatever that might mean), how would it train internal and external experts, much less the general public, in time for the 2016 elections?

  • PeterTx52

    what about investigating nonprofits that support liberal candidates? are they fair game?