A recent effort in Congress to require more
accountability of independent political groups that have non-profit,
tax-exempt status recently failed. But the Internal Revenue Service (IRS) has
all the tools needed, including a strong whistleblower program, to crack down
on the flaunting of tax rules by political lobbying organizations that claim
nonprofit, tax-exempt status.
The reason legislative solutions are being proposed is
that the IRS has failed to do its job, allowing thinly veiled fronts to raise
funds using their tax-exempt status, then use those funds to engage in
political lobbying.
In what is apparently the first action of its kind against
a political, tax-exempt organization, Phillips & Cohen LLP filed on behalf
of Common Cause a
whistleblower claim with the IRS against the American Legislative Exchange
Council (ALEC) asserting that it is a lobbying organization masquerading as
a “public charity.” If the IRS were to enforce its rules, perhaps more
whistleblowers would come forward and provide key information to stop such
violations.
