CREW: No Need to Punt to the IRS, Senate Finance Committee Should Investigate Groups Influencing Elections

For Immediate Release

Contact: 

Matt Jacob
Phone: 202.408.5565

CREW: No Need to Punt to the IRS, Senate Finance Committee Should Investigate Groups Influencing Elections

WASHINGTON -  With airwaves across the country flooded with political
advertisements, today Citizens for Responsibility and Ethics in
Washington (CREW) sent a letter to Senator Max Baucus requesting he and
the Senate Finance Committee investigate how so many 501(c)(4) groups
seem to be circumventing tax law in an attempt to influence the upcoming
elections.  Senator Baucus himself has already recognized
the potential problem, asking for the Internal Revenue Service (IRS) to
investigate.

"Senator Baucus has correctly identified the gaping hole in our
tax code that allows these faux tax-exempt groups to circumvent the law
thanks to the flawed Citizens United decision," said Melanie Sloan, CREW
Executive Director. "Yet, as Chairman of the Finance Committee, Senator
Baucus can do something about this. He does not need to punt the matter
to the IRS; rather, the Finance Committee can and should immediately
begin its own investigation.  The committee has the jurisdiction and
authority to subpoena witnesses and documents to get a handle on the
extent of the abuse of the tax code and begin working towards a
legislative solution."

Americans are being bombarded with advertisements by shadowy groups.  Citizens for a Working America,
for example, recently sprouted up with an ad attacking Congressman John
Spratt (D-SC).  The group claims 501(c)(4) status, and as such, does
not have to disclose its donors.  Under the tax code, however, a
501(c)(4) organization's primary work must be devoted to advancing
issues, not solely influencing elections. As a result, it is hard to see
how this group qualifies as a 501(c)(4).

More brazenly, GOP leader Karl Rove has promised to drop more than $50 million into election ads through his two groups: American Crossroads
and American Crossroads GPS, the latter of which is a 501(c)(4) group.
Just yesterday the groups announced a $4.2 million ad buy in eight
targeted senate races.   To date, they have spent about $18 million,
most of it on television ads. 

"Although Republicans seem to be more adept at taking advantage of
this hole in the tax code this election cycle, this not about politics,
but about tactics," said Sloan.  "To put these ads into proper
perspective, the American people need to know the true identities of
those behind them.  The Senate Finance Committee has spent a lot of time
considering whether 501(c)(3) organizations have abused their tax
status, it is time to turn their attention to the 501(c)(4)s."

CLICK HERE to read CREW's letter to Chairman Baucus and Ranking Member Grassley.

CLICK HERE to see CREW's exhibits of evidence in this matter. 

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Citizens for Responsibility and Ethics in Washington (CREW) is a nonprofit 501(c)(3) organization dedicated to promoting ethics and accountability in government and public life by targeting government officials -- regardless of party affiliation -- who sacrifice the common good to special interests. CREW advances its mission using a combination of research, litigation and media outreach.

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