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tax-exempt organizations, social welfare organizations, disclosure


This article was presented at a January 17, 2014 symposium sponsored by Pepperdine University School of Law and Tax Analysts. The article is used with permission of Tax Analysts.


This article argues that the IRS’s new proposed regulation on candidate-related political activities is a good first step. It creates a bright-line standard that is easy to apply and will reduce concerns that the IRS is manipulating the enforcement process for political gain. The regulation addresses serious concerns that some independent groups are circumventing disclosure laws in the code. These groups are improperly arguing that they qualify as social welfare organizations when in fact they are political organizations subject to disclosure under section 527. A better solution would be for Congress to pass broad-based campaign disclosure laws that would apply regardless of the type of entity engaged in the activity. Absent broad-based disclosure, the IRS has the responsibility to enforce the restrictions contained in the code. Under the proposed regulation, organizations wishing to engage in candidate-related political activities may still do so. They simply must do so through a section 527 political organization and disclose their contributions and expenditures. However, absent broad-based disclosure, groups will seek out other entity structures to engage in non-disclosed candidate advocacy.

Publication Citation

142 Tax Notes 120 (2014).


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