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Sat May 25, 2013, 11:35 PM

"Six Facts Lost in the IRS Scandal" [View all]

Six Facts Lost in the IRS Scandal

by Kim Barker and Justin Elliott, ProPublica



Consider this our Top 6 list of need-to-know facts on social welfare nonprofits, also known as dark money groups because they don’t have to disclose their donors. The groups poured more than $256 million into the 2012 federal elections.

1. Social welfare nonprofits are supposed to have social welfare, and not politics, as their “primary” purpose.

A century ago, Congress created a tax exemption for social welfare nonprofits. The statute defining the groups says they are supposed to be “operated exclusively for the promotion of social welfare.” But in 1959, the regulators interpreted the “exclusively” part of the statute to mean groups had to be “primarily” engaged in enhancing social welfare. This later opened the door to political spending.

So what does “primarily” mean? It’s not clear. The IRS has said it uses a “facts and circumstances” test to say whether a group mostly works to benefit the community or not. In short: If a group walks and talks like a social welfare nonprofit, then it’s a social welfare nonprofit.

This deliberate vagueness has led some groups to say that “primarily” simply means they must spend 51 percent of their money on a social welfare idea — say, on something as vague as “education,” which could also include issue ads criticizing certain politicians. And then, the reasoning goes, a group can spend as much as 49 percent of its expenditures on ads directly advocating the election or defeat of a candidate for office


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applegrove May 2013 OP
BlueStreak May 2013 #1
John2 May 2013 #3
BlueStreak May 2013 #11
pansypoo53219 May 2013 #2
Iliyah May 2013 #4
LeftInTX May 2013 #5
ErikJ May 2013 #6
hay rick May 2013 #14
DallasNE May 2013 #7
applegrove May 2013 #8
DallasNE May 2013 #12
kelliekat44 May 2013 #9
George Gently May 2013 #10
DallasNE May 2013 #13
hootinholler May 2013 #15