Politics

Crossroads says IRS probes into its tax status are premature

Jon Ward Contributor

American Crossroads, the Karl Rove-backed group that has stepped into this election cycle and will play with as much money as the Chamber of Commerce and the big unions (about $50 million), has come under fire from Democrats for not disclosing its donors.

President Obama and Democratic leaders have made the group their personal punching bag this week, pressing the group’s 501c4 arm, Crossroads GPS, to say who is providing it with money.

The key to retaining 501c4 status is that a group not have its “primary purpose” be “direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.”

An attorney for Crossroads, Tom Josefiak, on Thursday sent a memo to its board of directors, donors and supporters arguing that it is in full compliance with the law, in what looks like an attempt to reassure donors — perhaps corporate executives or companies who are friendly with the administration but are privately unhappy with Obama’s policies, or who simply don’t want to be in the administration’s crosshairs — that they are not in danger of having their identities exposed.

Josefiak said that a letter from two liberal groups this week asking the IRS to investigate Crossroads GPS is “not a serious legal communication” but rather a “publicity stunt.” He bases this on the argument that it will not be possible to know if Crossroads has spent the majority of its time on issue advocacy until the end of the year.

“The ‘primary purpose’ of Crossroads GPS is not legally measurable at this point in time,” Josefiak wrote. “Today is October 7, which means it will be nearly three months before any external observer could ascertain the ‘primary purpose’ of Crossroads GPS during calendar year 2010.”

“Crossroads GPS anticipates being highly engaged in the issues debate during the ‘lame duck’ session of this Congress, this year,” he wrote, saying that this issue advocacy later on in the year would bring the group into compliance.

To read the full document click here.

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