March 14, 2012; Source: The Hill

Let’s hope that the IRS has a hefty appropriation earmarked for its tax exemption investigations, because the number of requests for it to look into 501(c)(4) organizations that are potentially doing more politicking than “social welfaring” is growing. Yesterday, Citizens for Responsibility and Ethics in Washington (CREW) called for an investigation of Americans for Tax Reform (ATR), the 501(c)(4) founded by Grover Norquist that has promulgated the famous “pledge” that many Republicans have signed, vowing never to raise taxes.

CREW isn’t challenging Norquist’s philosophy of shrinking government to the point at which it can be drowned in a bathtub, nor the corollary of his no-tax-increase pledge, which he told Comedy Central’s Jon Stewart is only step one, to be followed by step two: “Stop spending so much money.”

Rather than taking on Norquist and his entertaining political banter, CREW is simply pointing out that ATR told the Federal Election Commission (FEC) that it spent $4.2 million in independent political expenditures in 2010. Somehow, on the Form 990 ATR filed with the Internal Revenue Service, it claimed only $1.85 million in political activities for the same time period. In the formal complaint submitted to the IRS, CREW argues that ATR’s report to the FEC nine months before the filing of its tax statement with the IRS indicates that, “Norquist’s and ATR’s failure to report more than half of ATR’s political spending may have been willful.”

Grover Norquist’s numbers just don’t add up,” CREW executive director Melanie Sloan said in a statement. “Perhaps Mr. Norquist should sign a pledge that he won’t lie to the IRS about his group’s political activity.”

As we have seen with many 501(c)(4) organizations, the social welfare content of whatever they do is often difficult to spot. The financial calculation seems to hinge on the difference between political expenditures and non-political expenditures—without much digging into whether the non-political stuff has much or any relationship to concepts of social welfare. Hopefully, groups with the tough mettle of a CREW will eventually take on exactly how much real social welfare work is left in the remnants of what 501(c)(4) social welfare organizations purport to do.

In the meantime, it is great that CREW is watching and comparing (c)(4)s’ filings with the FEC and the IRS and spotting discrepancies like ATR’s missing $2.5 million in political expenditures. Whether one likes the ideas promoted by Norquist and ATR or not, CREW’s complaint is the essence of what a watchdog is supposed to do.—Rick Cohen