Key Arizona Tea Party groups say IRS did not give them additional review

[starroute]

8. It's a bit more complicated than that

Last edited Mon May 13, 2013, 05:14 PM - Edit history (1)

501(c)(3)'s are barred from all political activity, although they can conduct research and education on particular issues as long as they don't back specific candidates or legislation. In addition to these groups themselves being tax-exempt, donations to them are tax-deductible.

Contributions to 501(c)(4)'s are not tax-deductible, but they have a bit more latitude in their actions. They can lobby as long as that is not their primary activity and can recommend candidates to their own members (though not to the general public), but they are not allowed to coordinate their activities with a federal candidate or party.

Obviously, both categories have loopholes. A lot of very partisan activity can pass as "educational," and a lot of covert coordination takes place on a "wink and a nudge" basis, where the 501(c)(4) simply watches the candidate's political ads and reinforces their message. So the problem for the IRS is figuring out in advance which groups are likely to violate the guidelines and subjecting their applications to stricter scrutiny.

(See http://www.stealthpacs.org/about/page.cfm?pageid=7)