Psst! IRS! Over Here! Luo Again Hints IRS Could Pry Into Campaign Financing By Pro-GOP Groups

On Monday, reporter Michael Luo hinted (again) that the IRS and the Federal Election Commission might find it worth their while to investigate some of the GOP-affiliated groups making campaign ads this election cycle, "Groups Push Legal Limits In Advertising."

The Times has certainly raises its level of concern over anonymous funding in political campaigns from 2008, when Obama was a main beneficiary. Back then, the paper dealt with the matter with this nothing-to-see-here headline from October 7, 2008: "G.O.P. Query Involves 1% of Giving to Obama."

Luo wrote on Monday:

Campaign funding by independent groups, including some funded anonymously by corporations, have been on the upswing since a sympathetic Supreme Court ruling, Citizens United, which loosened restrictions on the explicit type of advertising nonprofits can do before an election.

A recent television commercial sponsored by an Iowa-based nonprofit group, American Future Fund, attacking Representative Bobby Bright, an Alabama Democrat, could hardly have been more explicit in its closing: "On Election Day," the narrator said, "take the right path. Vote against Bobby Bright."

Such a direct appeal to voters might seem unremarkable, but actually it is an example of an important new tool afforded to outside interest groups that is reshaping the contours of this year's midterm elections.


In the process, however, the groups are, as never before, pushing the legal limits that enable them to preserve the anonymity of their donors. They are doing so just as Democratic officials and campaign finance watchdogs - alarmed by the gushers of secret money pouring into races, largely in favor of Republicans - have stepped up their calls for investigations by regulators.

Problems with the I.R.S. could lead to tax penalties and revocation of tax-exempt status
. But nonprofit groups engaging heavily in express advocacy could also run into issues with the Federal Election Commission. If the commission determines that a group's "major purpose" is political, the group is required to register as a political committee and disclose its donors.

The commission's three Republican members, however, are generally inclined to give these groups leeway, effectively deadlocking the commission because it is split along party lines, and a majority vote is required for it to act. But if most of a group's spending seems to be on express advocacy, even the Republican commissioners would probably have to scrutinize the group, lawyers said.

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