Įxterior of an Internal Revenue Service office. Alabama, when the Court held that disclosure of names could render private donors vulnerable to retaliation. This protection dates back to the United States Supreme Court's 1958 ruling in NAACP v. Internal Revenue Service rules also protect groups organized under Section 501(c)(4) as nonprofit organizations dedicated to social welfare from having to reveal the names of their donors or the amount of funds the individual donors have contributed. As a result, the IRS traditionally has permitted organizations described in IRC 501(c)(4) to engage in lobbying and political campaign activities if those activities are not the organization's primary activity. Treasury regulations interpreting this statutory language apply a more relaxed standard, namely, that the organization "is operated primarily for the purpose of bringing about civic betterments and social improvements".
The statutory language of IRC 501(c)(4) generally requires civic organizations described in that section to be "operated exclusively for the promotion of social welfare". § 501(c)), exempts certain types of nonprofit organizations from having to pay federal income tax.
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United States federal tax law, specifically Section 501(c)(4) of the Internal Revenue Code ( 26 U.S.C. 6.2 Senate Finance Committee final reportīackground Tax exemption and donor anonymity.3.2.1 Criticism of the inspector general.2.2 Public disclosure of tax information.2.1.1 Examples of questions from the IRS.2.1 Controversial intensive scrutiny of political groups.1.2 Citizens United ruling & Congressional requests for 501(c) investigations.In October 2017, the Trump Administration agreed to settle a lawsuit filed on behalf of more than four hundred conservative nonprofit groups who claimed that they had been discriminated against by the Internal Revenue Service for an undisclosed amount described by plaintiffs' counsel as "very substantial." The Trump Administration also agreed to settle a second lawsuit brought by forty-one conservative organizations with an apology and an admission from the IRS that subjecting them to "heightened scrutiny and inordinate delays" was wrongful. On September 8, 2017, the Trump Justice Department declined to reopen the criminal investigation into Lois Lerner, a central figure in the controversy. On October 23, 2015, the Justice Department declared that no criminal charges would be filed. In January 2014, James Comey, who at the time was the FBI director, told Fox News that its investigation had found no evidence so far warranting the filing of federal criminal charges in connection with the controversy, as it had not found any evidence of "enemy hunting", and that the investigation continued. The report was criticized by the committee's Democratic minority, which said that the report ignored evidence that the IRS used keywords to identify both liberal and conservative groups. The Republican majority on the House Oversight Committee issued a report, which concluded that although some liberal groups were selected for additional review, the scrutiny that these groups received did not amount to targeting when compared to the greater scrutiny received by conservative groups. According to Republican lawmakers, liberal-leaning groups and the Occupy movement had also triggered additional scrutiny, but at a lower rate than conservative groups. Initial reports described the selections as nearly exclusively of conservative groups with terms such as " Tea Party" in their names.
Conservatives claimed that they were specifically targeted by the IRS, but an exhaustive report released by the Treasury Department's Inspector General in 2017 found that from 2004 to 2013, the IRS used both conservative and liberal keywords to choose targets for further scrutiny. This led to wide condemnation of the agency and triggered several investigations, including a Federal Bureau of Investigation (FBI) criminal probe ordered by United States Attorney General Eric Holder. In 2013, the United States Internal Revenue Service (IRS), under the Obama administration, revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes.