Tax-exempt rules should be changed
CHARLESTON, W.Va. -- During the recent controversy involving the IRS targeting specific groups for scrutiny over their tax-exempt status, another scandal is being overlooked. This involves groups exploiting the 501 c(4) system to funnel money into elections without having to disclose where this money comes from.
The tax-exempt 501 c(4) system was set up for social welfare organizations, not for political groups. It was OK if you had to do some lobbying on an issue directly related to your mission, but lobbying could not be your focus, as this status was not meant for groups influencing elections and spending dark money without having to pay taxes.
Disclosure of money in elections is a serious issue. From what place, what industries, what groups? Our democracy demands that we know who is funneling money and their angle. We cannot allow the 501 c(4) status to be subverted into another way to drown out our voice.
The IRS made a serious mistake when it interpreted the code saying that organizations had to "exclusively" be involved in social welfare to mean "primarily" without any kind of guidelines. Social welfare and dumping secret money into elections have nothing in common.