Is Karl Rove In Trouble With The IRS? By Dan Froomkin | HuffPost | 08/31/2012 6:10 pm Excerpts: WASHINGTON - A new report from Congress' nonpartisan research arm suggests that the Internal Revenue Service 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. 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 (CRS), first reported by Diane Freda for Bloomberg BNA, 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. For instance, a recent $4.2 million Crossroads GPS ad buy attacked four Democratic Senate candidates, using the figleaf of calling on them to do such things as repeal health care or "cut the debt" - as if there was imminent action about to be taken on the Hill. The CRS report notes, however, that "when there is no pending legislative vote or other non-electoral activity, the IRS rulings suggest it can be difficult for an ad to avoid being classified as campaign activity." Crossroads GPS publicly released its 2010 and 2011 tax filings in April, claiming tax-exempt status as a social welfare group under section 501(c)(4) of the tax code. But the IRS has not yet approved its status. Should the IRS conclude that the group is primarily political in nature, the results could be politically explosive. Tax experts tell The Huffington Post that political groups that don't disclose their donations and expenditures to the IRS are subject to a 35 percent penalty on all donations that should have been disclosed but weren't and another 35 percent for the expenditure of that donation. So a reclassified group could be on the hook for a 70 percent tax bill - and might have to disclose its donors, to boot. Campaign finance reform groups, including Democracy 21, argue that 501(c)(4) status should be denied to any group - Republican or Democratic - that is trying to disguise its political nature in order to avoid disclosure. We have long believed that groups like Karl Roves Crossroads GPS, Priorities USA and American Action Network are abusing the tax laws and are not entitled to tax-exempt status as 501(c)(4) 'social welfare' organizations," Democracy 21 President Fred Wertheimer told HuffPost on Friday. "Thats why we have sent a series of complaints to the IRS asking for these groups to be investigated and for the IRS to take appropriate action against them. Jonathan Collegio, a spokesman for Crossroads GPS, could not be reached for comment Friday. The ruling, in a suit brought by Rep. Chris Van Hollen (D-Md.), partly closes the c4 loophole by requiring disclosure of the donors paying for any ad that mentions federal candidates - without expressly advocating for their defeat or victory - within 30 days of a primary or convention, or 60 days of a general election. As NPR reports, the Koch-brothers-backed Americans for Prosperity recently began a $25 million ad campaign flatly telling voters to vote against Obama. http://www.huffingtonpost.com/2012/08/31/karl-roves-donor-plan-afoul_n_1847834.html ...... The republican attack ads people have been covering their political businesses with a 501C4 social welfare status rating to escape taxes while they go about fund raising and giving republican politicians the funds needed to win an election. This is clearly unconstitutional if they do not give the same amount to other politicians regardless of their political persuasion. If they want tax exempt status, they must distribute the funds collected for any politician seeking office. Instead they have worked with republicans ONLY and have attack ads, blunt instructions as to how to proceed in an alection cycle that would be advantageous to republicans only, and have actively financed only republican candidates. So instead of being gleefully tax exempt, they will be taxed up to 70% if they are designated as a purely poltical arm of the republican party, and will be made to disclose all donors who have been enjoying anonymity. As the Congressional Research Committee revealed, the IRS would easily be able to tax at 70% any organization that is trying to hide its poltical nature to avoid donor disclosure.
I didn't need to read any further. "Loophole" is code word used by the loony left-wing nuts to give the impression that someone is doing something illegally when in fact they are abiding by all current tax laws.
Unlike in 2008 when it was Obama who was bringing in tons of money..... it seems this time Obama and his team are a bit upset they are being beat on donations.
..... After you got thru savaging the authors, you could have at least said something (anything) about the article. Or is this the new and improved prfessor peabody?..... btw: another D-....for lack of focus....
And of course righties don't even attempt a defense or an excuse...they don't care if it's true or not
Unlike libs, "Facts are not important, it is the seriousness of the allegation", maybe we don't worry about such things until they proven.
I wouldn't dignify with responding to it. I think it's just more Crapola from the Soros propaganda machine.
Too bad there isn't such a thing as a non political place from which to extract quotes. The entire media establishment is now so political I don't believe anything I read in the press that has even a slight political overtone. It really is a shame.
what is there to say about yet another Huffpo article from you without facts. The "watchdog" group suggests.................................suggests so the Harry Reid lie didn't work on ROmney so now we have Huffpo BS attacking Rove how is this a fact based current event? It like most of your cut and paste articles should be in conspiracy.
Is Obama diddling 4 YO boys? Is Harry Reid pimping out Nasty Pelosi in Searchlight, NV? My sources say yes.
Tax loopholes have two interpretations: 1) Illegal activity that can be disguised as legal, or 2) Legal activity that can appear to be illegal under the rules. In either case, it isn't a left or right wing "nutjob" idea since both sides use the IRS for their own political purposes. We can look at "The Center for American Progress" or any of the so call immigration reform groups or any of the tax advocacy groups and know that most of these sites will encourage a certain political party their way. We can do the same with the Center for Budget and Policy, New Democracy Network, and Council for Hemospheric Affairs that will encourage a certain party to think their way. The loophole in these grous is that they are issue oriented and are supposed to be "non partisan" even though every group that I listed is bias toward one political affiliation. Thus each of these groups exploit the loophole in the code to meet their own political objective as long as none of the groups I listed specifically endorse a specific candidate. However, when it comes to groups such as some of the tea party groups or any of the political 501c4 organizations, these groups exploit the tax loophole differently. Athough these groups may be issued oriented, there tends to be a closer connection to adovating a poltiical party more directly by merging the organization directly into the candidate running for office. That is what gets the ire of the IRS on more than one occassion. These groups should not be 501c4, but actually 527 groups. The main reason why they don't is because of the McCain-Feingold Law that 527 groups must adhere to while 501c4 groups report under a different reporting requirement. This is closer to the first definition of how tax loopholes are used and tend to be more illegal than legal.
... I have another source telling me Joe Biden drinks like a fish too... oh wait... you already knew that one?
