WASHINGTON—The Senate’s chief tax writer has called for a federal investigation into advocacy groups that have become increasingly popular vehicles for outside donations.
These groups, known as 501(c)4s after the section of the tax code that defines them, can raise unlimited donations from individuals, corporations and labor unions to spend on political advertisements.
They don’t have to reveal the names of their donors, because they are established as tax-exempt social-welfare organizations. But tax rules prohibit such organizations from focusing “primarily” on political campaign activity.
On Tuesday, Sen. Max Baucus (D., Mont.), the chairman of the Senate Finance Committee, asked the Internal Revenue Service to look into whether the organizations are violating the rules for tax-exempt entities.
Full Story: Baucus Urges Probe of Fund Raising – WSJ.com