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Who's the Right Watchdog for Nonprofits' Political Activity? | Rules of the Game

Likewise, social welfare advocates probably won’t like tax expert Joseph J. Thorndike’s solution, recently outlined in the Washington Post: eliminate section 501(c)(4) of the tax code altogether. “Encourage nonprofits to forswear political activity,” urged Thorndike, a contributing editor for Tax Notes magazine.

“Social welfare groups have historically played such a critically important role in bringing more content, diversity and substance to our national debate,” noted Nan Aron, president of the Alliance for Justice. “Many do great work.”

Other proposals, such as the campaign finance transparency law known as the DISCLOSE Act, which Democrats have set out to revive, stand little chance of passage. Senate Minority Leader Mitch McConnell, R-Ky., now calls the legislation a bid to silence and intimidate its authors’ political opponents, akin to the recent IRS abuses.

Still, the more IRS fixes that get thrown on the table, the better. Sooner or later, one of them will stick — whether it’s creating a 10 percent political spending threshold for tax-exempt groups, as San Francisco tax lawyer Gregory Colvin has suggested, or giving the FEC and the IRS joint oversight, an idea floated by University of Miami law professor Frances R. Hill.

As Campaign Legal Center senior counsel Paul S. Ryan put it: “If there’s a silver lining in this recent IRS controversy, it’s that there can be no doubt that the IRS and the issue of 501(c)(4) groups getting involved in elections is on Congress’s radar.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

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