Tag Archives: FEC

8 Initiatives to Fight Big Money in Politics – Part 2

This is a continuation of a prior post concerning initiatives to fight big money in politics.  In that post, 4 initiatives were discussed in which action can be taken to reduce the influence of big money in politics and in our government or, at least, bring attention to that need. This post discusses 4 more initiatives.

5. SEC Regulation

This initiative involves soliciting the Securities and Exchange Commission (SEC) for a rules change in order to provide more transparency in corporate political spending. One of the arguments used by the Supreme Court in substantiating its Citizens United decision was that there would be full disclosure and transparency in corporate political spending, so there was no need to worry. However, this has turned out not to be the case. Because of the dysfunctional Federal Election Commission (FEC), disclosure rules are becoming more and more ineffective because of all the loopholes. Even Congress tried to pass a law requiring all publicly traded corporations to disclose their political spending, but has twice failed. Many are now looking to the SEC to act. Since the SEC has rulemaking authority in this area, it has the power to require disclosure. Continue reading

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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

The Real Story Behind 501(c)(4)s and 527s – Part II

by Kellye

In an update to the previous post (Part 1), Representative Chris Van Hollen of Maryland filed a lawsuit last week on August 21 against the U.S. Treasury Department.  This lawsuit would force the IRS to change its criteria for approval of organizations desiring 501(c)(4) status to what Congress had intended when it created that status and to enforce the law as written (click here for article). Specifically, an organization desiring 501(c)(4) status must be “operated exclusively for the promotion of public welfare.” Congress never intended section 501(c)(4) to be used by political groups to gain tax-exempt status.

After Congress decided to reform campaign finance in the early 1970’s with the passage of the Federal Election Campaign Act (FECA) and its amendments, Congress created section 527 of the IRS tax code to deal with political groups in 1975. This section of the code has its own set of rules in qualifying for tax-exempt status. Political committees (Republican National Committee, Democratic National Committee, and all the various Senate and House fund-raising committees), PACs and Super PACs fall into the 527 category. These groups are regulated by the Federal Election Commission (FEC) because their purpose is political. Continue reading