SMRs and AMRs

Friday, August 27, 2010

Conservative Group Accused of Abusing Tax Status

By ERIC LICHTBLAU
NYT

WASHINGTON — Democrats are charging that political commercials financed by an increasingly prominent conservative foundation with ties to the Tea Party violate the foundation’s tax-exempt status by crossing the line into political campaigning.

In a complaint filed this week with the Internal Revenue Service, lawyers for the Democratic Congressional Campaign Committee charged that the group, the Americans for Prosperity Foundation, has been running ads in Kansas, Missouri and Michigan that are inherently “political in nature,” contravening a ban under federal tax law. A copy of the complaint was provided to The New York Times.

The foundation, which has just begun a $1.4 million ad campaign criticizing the economic policies in Washington as “wasteful spending,” has become a vocal critic of Democratic policies and drew a rebuke this month from President Obama.

Non-profit groups like the foundation, which falls under section 501(c)3 of the tax code, are forbidden from participating in “any political campaign on behalf of or in opposition to a candidate.” They may, however, seek to educate voters or conduct broader get-out-the-vote drives “if conducted in a non-partisan manner,” the I.R.S. says.

(More here.)

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