IRS Never Approved ”Social Welfare” Application of Karl Rove’s Dark Money Group
Crossroads GPS, the so-called “dark money” group started by Republican strategist Karl Rove, has been operating for the past two years without approval from the Internal Revenue Service (IRS) regarding its nonprofit status.
Under the U.S. tax code, 501(c)(4) groups are tax-exempt because their purpose is “social welfare.” They are allowed to engage in a certain amount of political activity, but politics cannot be their primary focus.
According to the application, Crossroads planned to spend half its efforts on “public education,” 30% on “activity to influence legislation and policymaking” and 20% on “research,” including sponsoring “in-depth policy research on significant issues.”
In fact, Crossroads spent more than $70 million from anonymous supporters on the 2012 election. According to Kim Barker of ProPublica, “Within two months of filing its application, Crossroads spent about $15.5 million on ads telling people to vote against Democrats or for Republicans in the 2010 midterm elections.”
The assumption is that the IRS is giving the application extra scrutiny before making a decision. If the IRS decides to reject the nonprofit application, Crossroads would be legally obligated to disclose the identity of its many secretive donors.
To Learn More:
Karl Rove’s Dark Money Group Promised IRS It Would Spend ‘Limited’ Money on Elections (by Kim Barker, ProPublica)
Karl Rove Group Pours Anonymous Millions into Anti-Obama Ads (by Noel Brinkerhoff and David Wallechinsky, AllGov)
IRS Clashes with Conservative Campaign Groups Claiming Non-Profit Status (by David Wallechinsky, AllGov)
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