WHY DO PEOPLE WANT TO DONATE ANONYMOUSLY TO 501(c)(4) ORGANIZATIONS: FALSE AND UNSAVORY ATTACK ADS.

INFAMOUS WILLIE HORTON ATTACK AD RUN A FEW DAYS BEFORE BUSH v.DUKAKIS PRESIDENTIAL ELECTION. BOTH BUSH AND DUKAKIS HAD BEEN IN OFFICE WHEN WEEKEND FURLOUGH PASSES WERE IN EFFECT. BUSH UNDER THE FEDERAL PROGRAM AND THE MODEL FOR THE MASSACHUSETTS PROGRAM UNDER MICHAEL DUKAKIS. BUSH CLAIMED AD RUN BY AN UNKNOWN PAC GROUP. BUT FACTS SHOW BUSH”S CAMPAIGN MANAGER LEE ATWATER (MENTOR TO KARL ROVE) WAS THE INSTIGATOR OF THE ALLEGEDLY ANONYMOUS AD THROUGH A PAC GROUP WHOSE FUNDERS WERE UNKNOWN. AD RAN ONLY IN THE SOUTH TO SCARE VOTERS WORRIED ABOUT VIOLENT BLACK CRIMINALS.

After the  Citizens United v. Federal Elections Commission(Citizens United)  decision many political advocacy groups sought tax exempt status under 26 USC 501(c)(4.) Which more importantly provides for anonymity of donors?

This would allow people to donate to entities that create false attack ads like the Swift Boat Ads and remain anonymous.

Also This would allow groups with political agendas to solicit money from donors to fund their activities and even hire a professional staff at salary to accomplish their ends. The IRS was inundated with requests to qualify as 501(c)(4) status including a large number of Tea party and related organizations organized for the political purpose of electing and promoting conservative politicians and causes i.e.: interpreting the Constitution and The Bill Of Rights according to their view usually in an ultra conservative manner

26 USC 501(c)(4) was originally enacted for Little League, Parent Teacher Organizations, Scout Troops ,  and other like organizations primarily devoted to education, social welfare or cultural activities for the benefit of their communities.

However some degree of political activity was allowed for and organizations primarily devoted to other non political non business endeavors like the local Little League petitioning the city council for more fields.

However after Citizens United some saw an opportunity to fund political organizations with anonymous donations to use for unsavory political acts  for  the election of like minded politicians. As a furtherance to their activities they sought classification under 501(c)(4) of the IRS code as nonprofit organizations primarily engaged in educational, welfare or cultural activities. A large influx of applications by these political organizations seeking cover under IRS Code Sec. 501(c)(4) occurred. Thus the revenue service was inundated with applications from organizations with political clout in Washington because of their primary activity was getting their defenders elected.

We now see a push on now to force the IRS not to weigh the activities of these applicants and waive them through to tax exempt status even though 26 USC 501(c)(4) says otherwise.

However the conduct being looked at is the IRS classification of Tea party and other groups with patriotic words in their name for closer review because it appeared that their main activity was political and therefore they were not covered by the act. When is the the last time you saw a tea party goup have a cook out for the girls scouts.

Karl Rove’ Cross Roads GPS, according to, PRO PUBLICA “recieved $70 million from anonymous donors in the 2012 election and told the Internal Revenue Service that its efforts would focus on public education, research and shaping legislation and policy. This was done in its 501(c)(4) application which has not yet been approved.'” PRO PUBLICA further stated “Crossroads’ breakdown of planned activities said  it would focus half  its efforts on ‘public education,” 30 percent on ‘activity to influence legislation and policy making’ and 20 percent on “research,” including sponsoring ‘in-depth policy research on significant issues.’

This seems at odds with much of what the group has done since filing the application, experts said. Within two months of filing its application, Crossroads spent about $15.5 million on ads telling people to vote against Democrats or for Republicans in the 2010 midterm elections.”

“American Crossroads (Crossroads GPS sister organization), which does identify its donors, spent almost $105 million on election ads in the 2012 cycle. For its part, Crossroads GPS poured more than $70 million into ads and phone calls urging voters to pick Republicans — outlays that were reported to the Federal Election Commission. It also announced spending an additional $50 million  on ads critical of President Barack Obama that ran outside the FEC’s reporting window.” PRO PUBLICA

On the other hand liberal democratic Pac Priorities USA has also applied for 501(c)(4) status It is the sister organization of Priorities USA Action which is not a 501(c)(4) entity and does disclose its donors. It backed Obama in 2012 and aired the commercial by a worker saying that Romney killed his wife by his business activities.Washington Post 5/15/13

The IRS was pushed into a corner on 501(c)(4) classification by powerful political pacts which wanted to secure anonymity for certain donors and also a tax exempt status. Now the temporary director of the IRS has been forced to resign all due to a classification error of entities that were highly questionable as to their  ability to qualify for 501(c)(4) status .

TAKE AWAY: 501(c)(4) organizations  want anonymity for their donors  so they will not be associated with unsavory,  false or misleading attack ads televised at the last minute during elections. Strict compliance with the law in regard to all elegible groups might lessen the ability or inclination to air last minute false or misleading political commercials.

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