Many eyes are on the White House over news the IRS has been targeting Tea Party-like tax-exempt corporations. The law in question is 26 U.S.C. 501 (c)(4), which provides tax-exempt status to organizations that are “operated exclusively for the promotion of social welfare.” Those are Congress’ words, not President Obama’s.
Under the law, (c)(4) groups get tax-exempt status. They differ from their (c)(3) cousins because (c)(4)s get to participate in politics—the theory being that voters deserve to hear views of groups dedicated to “social welfare.” In Minnesota, (c)(4)s have ranged from taxpayer-rights groups to Lions Clubs.
Because Congress created the law in the first place, it has the ultimate responsibility to make sure it’s being enforced. Secondarily the executive branch does too, by and through the IRS. To that end, the Minnesota Council of Nonprofits reports that in 2011 the IRS revoked the tax-exempt status of more than 5,100 Minnesota nonprofits, 666 of them (c)(4)s.
Many were revoked because they were no longer in existence. Still, by its acts, the IRS was doing its job. That also is true with respect to its investigation Tea Party groups. But what both the IRS and Congress need to do is ensure (c)(4)s of all political stripes get the same treatment.