“This is blown vastly out of proportion,” said Smith, whose Alexandria, Virginia-based group opposes limits on campaign spending.
Levin, chairman of the Permanent Subcommittee on Investigations, said he will ask IRS officials why they didn’t move to prevent the nonprofits’ spending on U.S. elections.
Senate Questions
Nonprofits “are not allowed to engage in political activities and must be exclusively into social welfare efforts,” Levin said in an interview. “Why has the IRS not enforced our laws?”
Melanie Sloan, executive director of Washington-based Citizens for Responsibility and Ethics, asked the same question. CREW is suing the IRS and petitioning the agency to enforce the law more literally and ban nonprofits from political spending.
According to the group’s filing, federal law requires such nonprofits, incorporated under the tax code’s Section 501(c)(4), to be “operated exclusively” for social welfare activities. IRS regulations say only that such groups must be “primarily engaged” in promoting “the common good and general welfare.” Organizations have interpreted the regulations to mean they may engage in political activities as long as that makes up less than 50 percent of their spending, the petition said.
“We’ll use every tactic we can think of to force the IRS to do something,” Sloan said.
IRS Letter
The IRS this year asked more than 1,300 nonprofits for information about their activities, including whether they’ve engaged in politics.
The questionnaire went to nonprofits that have claimed tax- exempt status without filing an application with the IRS, which is permissible. It wasn’t sent to organizations such as Crossroads, which has asked for nonprofit status and is waiting for an IRS ruling.