LOD: Citizens United Kickback

Two national campaign reform groups are asking the IRS to take away the tax-exempt status of 501(c)(4) organizations that are electioneering shells, not genuine “social welfare” organizations as required by law. The letter challenges four Republican- and Democratic-leaning non-profits. Democracy NC has promoted this approach to cope with the expanded use of non-profits after the Citizens United decision. Using c-4 and c-6 vehicles allows corporations and wealthy donors to remain unknown to the public, and many of them lower their tax bills by deducting their donations as business expenses. Art Pope’s Variety Stores may have done exactly that with the $470,000 it donated to Civitas Action, Americans for Prosperity and Real Jobs NC (a 527 organization) for electioneering in key 2010 legislative contests. Variety’s money only became known because North Carolina’s disclosure laws are stronger than those at the national level. Hopefully, the reform groups will continue to press their case and make these donations taxable gifts rather than tax dodges.