IRS scrutiny urged on political nonprofits

A group of Senate Democrats urged the IRS on Friday to make sure politically active nonprofits are following the law and spending less than half of their resources to promote or oppose a candidate.But Sen. Orrin Hatch, R-Utah, warns the move is political "posturing" and an attempt to slow down groups that oppose Democrats and President Barack Obama."We never heard a peep from the other side in previous election cycles when they were reaping the benefits of these types of organizations," said Hatch, the top Republican on the Senate Finance Committee. "Sending the IRS on a politically motivated witch hunt is simply unacceptable and could have a chilling impact on the constitutionally protected rights to free speech."These nonprofits, known as 501c4 organizations, can accept unlimited donations and keep their contributors anonymous, making them attractive for corporations seeking to impact the elections. The IRS has started to question some of these groups, asking for extensive information before accepting their tax-exempt status, which has led to complaints, particularly from tea party organizations.Nationally, nonprofit groups like Crossroads GPS on the right and Priorities USA on the left are raising millions of dollars to spend on political advertisements. Similar outside groups are working on state races as well, including Hatch's contentious re-election bid.Freedom Path and the American Action Network are supporting Hatch in his bid for a seventh term in office, while the tea party group FreedomWorks for America is opposing Hatch with money shifted from its parent group.The Democratic campaign finance task force led by Sen. Chuck Schumer, D-N.Y., opposes the Supreme Court decision that allowed the proliferation of these politically focused nonprofits.According to The New York Times, the task force asked the IRS to crack down on nonprofits spending more than 50 percent of their money on politics and to prevent corporations from deducting donations on their taxes."We urge the IRS to take these steps immediately to prevent abuse of the tax code by political groups focused on federal election activities," the Democrats wrote, according to the Times. And if the IRS doesn't take action, the legislators warned they would seek legislation to force more oversight.The Campaign Legal Center and Democracy 21, two organizations advocating for tougher campaign finance rules, also sent a letter to the IRS on Friday requesting more investigations into these 501c4s."The agency also must not shrink from enforcing the law against violations of the tax code by political groups," the letter reads. "The stakes here — namely the integrity of our elections and of our tax laws — are much too high for the IRS to walk away from its responsibility to ensure that the tax laws are not being abused for political purposes." mcanham@sltrib.comTwitter: @mattcanham