IRS Addresses Partisan Political Misuse of 501(c)4 Status

For Immediate Release:

Contact: Susan Lerner

May 13, 2011


IRS Addresses Partisan Political Misuse of 501(c)4 Status

Statement by Common Cause NY’s Executive Director Susan Lerner

“We are pleased to learn that the IRS has taken action to enforce existing rules that are meant to address the misuse of an important tax-exempt status – 501(c)4 – to further partisan political goals and to make an end run around campaign finance laws. The practice has made a mockery of this tax status and damaged legitimate non-profits in the public interest for narrow political gain.

Now we can hope that this change in IRS policy is expanded beyond the five mega-donors they’ve targeted and that states, like NY, which have also developed their own homegrown partisan political 501(c)4s, take notice and impose disclosure requirements for the increased number of veiled political actors, like the Committee to Save New York.”

Context: The Internal Revenue Service announced that it has sent letters to five donors to nonprofit advocacy groups that are playing an increasing and highly partisan role in US politics, informing them that their contributions may be subject to gift taxes. The five donors were not identified, but are thought to include David and Charles Koch (who significantly fund libertarian Americans for Properity) and George Soros (a major donor to liberal causes).