3 Lessons From The IRS Scandal

Law360, New York (June 19, 2013, 4:54 PM EDT) -- On May 14, 2013, the Treasury Inspector General for Tax Administration (TIGTA) issued a report finding that beginning in early 2010, the Internal Revenue Service used “inappropriate criteria” to identify organizations applying for tax-exempt status under section 501(c)(4) of the Internal Revenue Code, commonly referred to as social welfare organizations (compared to section 501(c)(3) “charitable organizations”).

Under section 501(c)(4) and Treas. Reg. section 1.501(c)(4)-1(ii), an organization qualifies for exemption from income tax if it is “primarily engaged” in promoting social welfare, which cannot include participation or...
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