Exempt Orgs + Politics = Trouble

On February 16, 2012, seven Democratic Senators, including Senator Schumer of New York (a member of the Senate Finance Committee), sent a letter to Commissioner Shulman calling on the Internal Revenue Service to investigate whether §501(c)(4) social welfare groups have been improperly engaged in political campaign activities. In the letter, the Senators cite the rules for §501(c)(4) organizations which posit that “social welfare” does not include direct or indirect participation on intervention in political campaigns on behalf of or in opposition to any candidate for public office.

Also on the EO “political” front, on February 20, 2012, it was reported that John Junker, the ex-CEO of the Fiesta Bowl, would enter a plea bargain with the Arizona Attorney General admitting that he solicited Fiesta Bowl employees to make campaign contributions to candidates for public office which were then reimbursed by the Fiesta Bowl. It is likely that Junker could face up to 2.5 years in prison as a result of his transgressions.

Finally, indirectly related to EOs and politics, on February 22, 2012, it was reported that the Internal Revenue Service had revoked the tax-exemption for the U.S. National Slavery Museum which had been founded by the former Governor of Virginia, Doug Wilder. At this juncture, it is not evident why the Internal Revenue Service pulled the tax-exemption of the Museum, although it is possible it was because the Museum did not file anything with the Internal Revenue Service for three consecutive years.