Common Cause Calls for House, Senate Hearings on IRS Controversy

Focus Must Include Lax Enforcement of Post-Citizens United Surge in Political Groups Masquerading as Social Welfare Organizations

Common Cause called Monday for hearings in the US House and Senate to explore the Internal Revenue Service’s admission that it targeted certain groups for review, as well as the broader problem of the agency’s lax enforcement of political groups masquerading as tax-exempt social welfare groups.

“The IRS admission raises serious questions about political bias and demands a full airing,” said Arn Pearson, vice president of policy and litigation. “But its sweeping failure to enforce tax laws to prevent partisans from cynically misusing social welfare organizations to hide the identities of political mega-donors is just as problematic.”

“The real scandal here is the complete lack of enforcement of tax laws on the political right and left, while Congress and the Federal Election Commission have gone AWOL on common sense disclosure rules,” he said.

Since the Supreme Court’s 2010 Citizens United decision, the number of groups seeking tax exempt status as 501(c)4 social welfare organizations has doubled, and the amount of money these organizations have spent on political campaigns has skyrocketed. The Center of Responsive Politics reports 501(c)4s spent $254 million in 2012, almost as much as political parties ($255 million). The vast majority of that spending – 85 percent – came from conservative organizations, led by Karl Rove’s Crossroads GPS and Americans for Prosperity, backed by the Koch brothers.

By law, a 501(c)(4)’s primary purpose cannot include intervention in political campaigns, and the organizations are not required to disclose their donors. As a result, they have become vehicles for corporations and millionaires to hide large spending on behalf of candidates.

In March 2012, Common Cause filed a complaint with the IRS regarding one of those front groups – Liberty Central, formed by Virginia Thomas, while her husband, Justice Clarence Thomas, was still deliberating Citizens United. The complaint noted “substantial evidence of large-scale political activities” aimed at electing Tea Party candidates and defeating members of Congress who had voted for Obamacare, and asked the IRS to investigate. The agency did not respond to Common Cause.

Pearson also said it is worth noting that the increased pressure on the IRS is a direct result of the abysmal failure of Congress and the Federal Election Commission to enact or adopt common sense disclosure rules, despite the Supreme Court majority’s assurance that disclosure would allow voters to make informed decisions.