Wednesday, February 20, 2013

IRS Bought To Court Over 'Dark Money' Organization

The Internal Revenue Service (IRS) is being sued by a former congressional candidate who alleges that the agency wrongly allowed a so-called "dark money" political organization to operate as a tax-exempt entity.

Dr. David Gill is a Democrat who unsuccessfully ran to represent Illinois' 13th district in the 2012 elections. According to a report on The Huffington Post, Gill and the Citizens for Responsibility and Ethics in Washington (CREW) are arguing that the IRS should not have allowed the American Action Network (AAN) to spend $2.6 million in ads against Gill while at the same time enjoying tax-exempt status.

Gill and CREW allege that the agency misinterpreted tax laws when it released regulations for social welfare nonprofits. IRS guidelines state that these organizations must be "primarily" focused on social welfare, while the federal statute states they must be "exclusively" focused on it.

"It is offensive that the IRS turns a blind eye to reality and allows partisan political groups to seek refuge in a provision of the IRS code that is meant to govern organizations such as volunteer firefighter companies and homeowner organizations," Dr. Gill said in a statement.

Dr. Gill and CREW filed the civil lawsuit Tuesday under the provisions of the Administrative Procedure Act, which allows those who have suffered "sufficient harm" to file suit against the IRS. Gill can certainly claim to have suffered, as he believes that his close defeat -- he only lost by 1,002 votes to Republican Rodney Davis -- was due to "misinformation" spread about his support of Medicare in AAN's ads. One of those spots claimed that Gill would eliminate Medicare and replace it with single-payer healthcare.

AAN was the only 501(c)(4) nonprofit to spend significant money in the 13th district campaign.

You can read the full story on The Huffington Post.

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