Durbin Asked IRS’ Shulman to Probe ‘Several’ Conservative 501(c)(4) Groups in 2010
Democrats' background on the issue underscores their interest in turning the current scandal into a campaign finance narrative.
May 17, 2013 - 6:49 pm
“In addition to its tax-exempt status, an entity organized as a 501(c)(4) is not required to disclose to the public the sources of its funding. Given the millions of dollars these groups are pouring into Senate campaigns across the country, it is imperative that the organizations spending such sums on political advertising are appropriately disclosing relevant information about contributors,” Durbin continued. “The current spending patterns without disclosing the sources of the funding create a deeply troubling lack of transparency that threaten to undermine the ability of the electorate to make informed choices on Election Day.”
“I ask that the IRS quickly examine the tax status of Crossroads GPS and other (c)(4) organizations that are directing millions of dollars into political advertising, and respond with your findings as soon as possible.”
Less than a month later, the House changed hands in the midterm Tea Party rout.
Still, Durbin told reporters early this week “it is absolutely unacceptable to single out any political group — right, left or center — and say we’re going to target them.”
“That is unthinkable,” Durbin said. “That goes back to some of the worst days of the Richard Nixon administration. And I’m glad this administration stepped up and said we’ve made a mistake, we apologize and we’ll do things to correct it.”
Durbin’s request by far preceded a March 2012 letter to Shulman from 32 House Democrats asking the commissioner “to investigate whether any groups qualifying as social welfare organizations under section 501(c)(4) of the federal tax code are improperly engaged in political campaign activity.”
“In light of recent reports about the political activities of certain social welfare organizations, we respectfully request that the IRS review these organizations and take appropriate actions to ensure that they are in full compliance with all federal tax laws,” stated the letter led by Rep. Peter Welch (D-Vt.). “We urge you to investigate and stop any abuse of the federal tax laws by groups whose primary activity and true mission are to influence the outcome of federal elections.”
Seven Senate Democrats echoed the letter in the upper chamber, telling Shulman “if the IRS is unable to issue administrative guidance in this area then we plan to introduce legislation to accomplish these important changes.”
That letter was signed by Sens. Chuck Schumer (N.Y.), Michael Bennet (Colo.), Sheldon Whitehouse (R.I.), Jeff Merkley (Ore.), Tom Udall (N.M.), Jeanne Shaheen (N.H.) and Al Franken (Minn.). It followed a request to the IRS by the same group of Democrats urging better enforcement of rules pertaining to 501(c)4 organizations.
In July 2012, Lois Lerner, director of the IRS’ office for exempt organizations, responded to two requests by Democracy 21 and the Campaign Legal Center, both groups opposed to the Citizens United ruling, urging the IRS to launch a rulemaking process to change the 501(c)(4) rules.
“The IRS is aware of the current public interest in this issue,” Lerner wrote. “These regulations have been in place since 1959. We will consider proposed changes in this area as we work with the IRS Office of Chief Counsel and the Treasury Department’s Office of Tax Policy to identify tax issues that should be addressed through regulations and other published guidance.”
Shulman, who resigned three days after Obama won re-election, is expected to testify at a Wednesday House Oversight and Government Reform Committee hearing. George and Lerner are also on the invited witness list.