A group of Senate Democrats, led by Charles Schumer (D-N.Y.), complained to the IRS commissioner in 2012 that political groups were improperly claiming tax-exempt status and possibly allowing donors to wrongly claim tax deductions for their contributions. The lawmakers promised legislation if the IRS failed to address the issues with specific measures, namely clarifying how much political activity is acceptable for tax-exempt groups, requiring the organizations to document how much of their work is dedicated to non-political purposes and demanding that they tell donors what percentage of their contributions can be claimed as deductions. “We urge the IRS to take these steps immediately to prevent abuse of the tax code by political groups focused on federal election activities,” the senators said.
The IRS on Friday admitted to applying special scrutiny to conservative groups that applied for tax-exempt status during the 2012 election cycle. The targeting seems to have ended by May of 2012, according to documents from an inspector general’s report due for release later this week.
The letter from Democratic lawmakers underscores the concerns that arose after the 2010 Supreme Court decision in Citizens United v. Federal Election Commission, which allowed corporations and labor unions to register for tax-exempt status as long as their “primary purpose” was not political, as well as to raise and spend unlimited sums of money.