Monthly Archives: December 2013

Will Proposed IRS Rules for 501(c)4 Groups Really Make a Difference?

On the Tuesday before Thanksgiving, a joint press release from the Treasury Department and the Internal Revenue Service revealed that they are proposing new standards for 501(c)4 organizations. This move comes after accusations in the spring of 2013 that the IRS was unfairly targeting Tea Party nonprofits for audits of their political activity.

The rules for 501(c)4 “social welfare” organizations have long been nebulous. It is clear that they can only retain their tax-exempt status under certain conditions, and that they are intended to work for the “common good,” not for specific political parties or candidates. The current Tax Code states, “To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements).”

But the language of the rules — working primarily for social welfare — has never been adequately defined.   Continue reading