CREW Sues IRS Over Dark MoneySays agency has been sitting on its hands while 501(c)(4) groups spend millions on attack ads 2/19/2013 11:59:03 AM Eastern
Citizens for Responsibility and Ethics in Washington (CREW)
has filed a lawsuit against the IRS, saying its inaction has allowed 501(c)(4)
groups (tax-exempt nonprofits) to spend hundreds of millions on attack ads and
other activity, even though it says a federal law bars them from political
Unlike PACs, the 501(c)(4) groups do not have to identify
CREW is complaining that while federal law states that
501(c)(4) groups must operate "exclusively for purposes beneficial to the
community as a whole," IRS regs have interpreted that to mean that groups
"primarily" engaged in activities that promote public welfare
qualify. That means, says CREW, that some groups can spend up to 49% of their
funds on political activities.
The suit claims that "primarily" does not square
with the law's requirement of "exclusively." It wants to prevent
501(c)(4) from engaging in political activity, thus cutting off an avenue for
corporations and others to funnel so-called "dark money" into attack
ads through the nonprofits.
The lawsuit, however, alleges the IRS regulation is invalid
because "exclusively" and "primarily" are not synonymous and wants 501(c)(4)
groups barred from engaging in political activities.