IRS Hints at Halting Secret Campaign Money Flow

 IRS Has an Opportunity to Reduce Some Damage of Citizens United

In an interesting new blog post at his well respected website, Election Law Blog, Rick Hasen had a new post called “IRS Responds to Rulemaking Petition Submitted by Democracy 21 and Campaign Legal Center, Says Agency Will Consider Changing Rules for 501(c)(4) Eligibility.”  It turns out the IRS may crackdown on corporations and the wealthy using tax-exempt status to get around campaign finance rules.  This will be an interesting case to watch.  Hasen’s post related to a letter you can find here.

Secret Campaign Money Flow From Election Law Blog:

In a letter sent today to the IRS, Democracy 21 and the Campaign Legal Center acknowledged and welcomed a July 17, 2012 letter from Lois Lerner, IRS Director of the Exempt Organizations Division, stating that that the IRS “will consider proposed changes” in the regulations governing eligibility for section 501(c)(4) tax-exempt status.

We welcome Ms. Lerner’s statement in your July 17 letter that the IRS “will consider proposed changes” in the regulations governing eligibility for tax-exempt status under section 501(c)(4) organization. But we want to stress once again that the need for urgent action we noted in our July 27, 2011 letter is all the more true today.

From the Democracy 21 and the Campaign Legal Center who had prompted the IRS to act:

Political operatives are using “social welfare” organizations as conduits for injecting secret money into federal elections by attempting to exploit what they claim to be purported ambiguities in existing IRS standards.