Update on Proposed 501(c)(4) Regulations

In November of 2013, the IRS and the Department of the Treasury issued proposed guidance regarding qualification for tax-exempt status as a social welfare organization under §501(c)(4).  The guidance prompted uproar from almost every angle – generating over 150,000 comments.  In an attempt to clarify the perplexing guidance currently in existence regarding §501(c)(4)s and campaign activity, the proposed guidelines defined a new term – “candidate-related political activity” (affectionately referred to as CRAPA). Opposition to the proposed guidance created some strange bedfellows – even resulting in conservative and liberal organizations joining forces to oppose the new guidance.


In May, in response to the vast number of comments, the IRS announced that it would rewrite the guidance and incorporate the comments.  Just last week, IRS Commissioner John Koskinen told the Center for Public Integrity in an interview that new and more specific rules would be drafted, and should be expected in early 2015.  Koskinen says that the new guidance will address the definition of political activity, to whom it will apply, and how much can be conducted --- here’s to hoping!

For more background on the proposed regulations, you can see my prior post addressing this topic.



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