IRS To Blame For Abuse Of 501(c)(4) Rules, Watchdog Says

Law360, New York (January 23, 2014, 5:56 PM EST) -- The Internal Revenue Service misinterpreted the Revenue Code’s 501(c)(4) qualification criteria, leading to a massive influx of so-called dark money into politics, a government watchdog group said in a report released Wednesday.

Citizens for Responsibility and Ethics in Washington claimed the Revenue Code requires nonprofit groups to be “operated exclusively” for social welfare purposes, but IRS regulations say groups only need to be “primarily engaged” in promoting general welfare. The loose wording of IRS requirements allowed thousands of donors to support political campaigns without disclosing their...
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