Explosion of Political Groups Seeking Tax-Exempt Status May Have Led to IRS Scandal

The agency may have acted unfairly, but it may be time to give tax-exempt political groups a second look

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The types of groups the IRS was targeting also fall under the heading of so-called "social welfare" organizations, which can obtain tax-exempt, 501(c)(4) status.

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"The agency needs to apply clear and unequivocally neutral rules to its determinations about whether a group is in fact a 501(c)(4) social welfare organization, entitled to tax exempt status but not required to disclose its donors, or whether it is a political organization, also entitled to tax exempt status but not allowed to keep its donors secret," wrote Lisa Rosenberg, a Sunlight Foundation government affairs consultant. "Using a shortcut, like whether a group had the word 'tea party' or "patriot' in its name to aid in making that determination is dead wrong for an agency that must be scrupulously nonpartisan."

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