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Potential IRS Investigation into ‘Social Welfare’ Groups Has Some Corporate Donors Nervous

Yesterday, when the Campaign Legal Center* filed a complaint with the IRS against the 501(c)(4) group Crossroads GPS, alleging that it was abusing its

Jul 31, 2020
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Yesterday, when the Campaign Legal Center* filed a complaint with the IRSagainst the 501(c)(4) group Crossroads GPS, alleging that it was abusing its tax-exempt status because its “primary purpose” was election related, GPS spokesman Jonathan Collegio dismissed the complaintas politically motivated:
“This is a baseless complaint, filed by a partisan group that fundraises off of the baseless complaints they file,” Collegio said. “Crossroads GPS carefully and cautiously follows all laws governing 501(c)(4) organizations. Meanwhile, liberal groups spent more than $400 million in undisclosed campaign money in 2008 alone, with nary a peep of protest from liberal lobbyist Fred Wertheimer.”
Today, Mike Allen reportsthat some potential corporate donors aren’t as sanguine about the potential investigation:
One of the city’s best connected Republicans e-mailed us: “We are telling all of our clients, do not give a cent unless you accept the possibility that one day your contribution will be well be public. … i do not think you will see many blue chip companies, this is more for the wealthy.”
Because donations are not disclosed, the question of how much corporations are donating to groups like Crossroads GPS remains a guessing game. Indeed, one of the biggest draws of 501(c)s is the anonymity they can grant donors, which implies that corporations, especially those with a large direct consumer base, would choose them as their preferred outlet of giving. That a potential IRS investigation would have a chilling effect on such donations seems unlikely — lots of requests are filed with the IRS that simply go unanswered and uninvestigated — but certainly possible.
For what it’s worth, Collegio also emailed Allen with the subject line, “interestingly,” to say that “Despite the left’s coordinated … attacks, we received more new ‘likes’ on facebook today than on any day in our history.”
*UPDATE: Democracy 21, not the Campaign Legal Center, wrote the language of the document. Both groups attached their name to the complaint.
Camilo Wood

Camilo Wood

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Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing. Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers. Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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