AFP pushes the envelope on 501-C (4) restrictions

Jumping into the 2014 US Senate race in a most uncharitable fashion:

Americans for Prosperity is targeting Democrat U.S. Sen. Kay Hagan in a new web ad about renewable energy at the same time the conservative organization touts Republican Thom Tillis on taxes. The timing of the two ad campaigns is coincidental, said Dallas Woodhouse, the group's North Carolina director. "They have nothing to do with each other," he said.

Pardon our French, but that is a steaming pile of bullshit. Of course they're related; having the ads run simultaneously will make it much more likely voters will be able to connect the two candidates down the road. And behavior like this is also a big reason why the IRS focused on conservative "charities" in their recent crackdown:

One key issue is what constitutes a "primary" activity of a §501(c)(4) organization. The traditional interpretation has been that "primary" means 50% or more, though the IRS has never actually adopted this position, opting instead for a facts and circumstances analysis.6 The view that a §501(c)(4) entity may engage in political activities as long as they do not comprise 50% or more of the total activities of the organization is based on definitions or applications of the words "primary" or "primarily" in other contexts related to tax-exempt organizations. For example, a §501(c)(3) organization will be regarded as operated exclusively for one or more exempt purposes, as required by law,7 if it engages "primarily" in activities which accomplish one or more of such exempt purposes specified in §501(c)(3),8 and the word "primarily" in this context is considered to mean more than 50%.9 There are examples of similar definitions and interpretations.10

This is second time in recent months that the IRS has looked at §501(c)(4) organizations with a possible eye toward discouraging political activism. In early 2011, it was reported that the IRS was planning to initiate enforcement actions under the federal gift tax against certain individuals who had made previous donations to §501(c)(4) organizations. This created controversy and attracted the attention of Members of Congress, ultimately resulting the IRS announcing that it would "not use resources to pursue examinations" on the gift tax issue, and if it did so in the future, it would be "prospective and after notice to the public."

On that 50% issue, if you've been wondering what AFP expects to gain from this:

Wonder no longer. See, they have to at least be able to argue that 50% of their activity falls into the "social welfare" category, as opposed to directly engaging in partisan electioneering. So they spend money on this tax reform thing, including paying extra to promote Tweets like this one. One of the costs of buying government and keeping the actual buyers tax-free and anonymous.