Senators call 501(c)(4) organization tax treatment into question
August 09, 2012
Ten senators recently sent a letter to the Internal Revenue Service (IRS) to learn more about proposed changes to the way nonprofit 501(c)(4) organizations are taxed. Senator Orrin Hatch of Utah was the primary backer of the letter. He was joined by Senators Chuck Grassley of Iowa, Jon Kyl of Arizona, Pat Roberts of Kansas, Mike Enzi of Wyoming and John Cornyn and Kay Bailey Hutchison of Texas. South Dakota Senator John Thune, Mitch McConnell of Kentucky and Lamar Alexander of Tennessee also participated.
"We believe these petitions have less to do with concerns about the sanctity of the tax code and more about setting the tone for the upcoming presidential election, and we urge you to resist allowing the IRS rulemaking process to be subverted to achieve partisan political gains," wrote the Senators in the letter, which was sent to IRS Commissioner Douglas Shulman.
The tax regulations for 501(c)(4) nonprofits have been in place for 52 years, but they have recently gained attention as several groups with political affiliations were investigated when applying for the status earlier this year.
Nonprofit organizations can use
fund accounting programs to ensure funds are properly audited and allocated, so they can demonstrate that they qualify for various tax breaks.