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Sunday, September 2, 2012

Froomkin: Will the IRS Revoke Tax-Exempt Status of Karl Rove's Crossroads GPS After the Election?

Following up on Friday's post, CRS: Political Ads and the Tax Code:  Huffington Post:  Karl Rove's Donor Plan Could Run Afoul of IRS, Congressional Report Suggests, by Dan Froomkin:

A new report from Congress' nonpartisan research arm suggests that the IRS won't have much patience with the argument from groups like Karl Rove's Crossroads GPS that the ads it buys shouldn't be counted as political campaign activity.

The claim that ads attacking candidates aren't political -- as long as they avoid words like "vote" or "elect" -- is key to the empire of shadowy non-disclosing political groups that Rove, the Koch Brothers and other major political players have created. By insisting that most of their budget goes toward "issue advocacy," rather than influencing elections, these groups exploit a loophole that allows certain non-political groups to keep their donors secret.

The Aug. 30 report from the Congressional Research Service ... reviews IRS rulings on what qualifies as issue advocacy, and strongly indicates that the Rove-style ads wouldn't be a tough call for the agency -- which could revoke an organization's tax-exempt status.

http://taxprof.typepad.com/taxprof_blog/2012/09/froomkin-karl-roves-.html

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