American Crossroads Perspective on IRS Complaints

A memo from Tom Josefiak:

Within the space of a week, two letters were sent to the Internal Revenue Service urging the agency to investigate the activities of Section 501(c)(4) organizations and other groups, including Crossroads Grassroots Policy Strategies (GPS). We view both letters as part of a coordinated campaign by Democrats and their allies to create a hostile environment to dissuade potential donors from supporting independent conservative non-profit advocacy organizations in general, and Crossroads GPS in particular.

We are following these developments closely, and are well-aware of the IRS rules and regulations regarding permissible political activities of Section 501(c)(4) organizations. And, as explained in greater detail below, we are confident that Crossroads GPS is operating in complete compliance with all applicable laws and regulations.

A Coordinated Left-of-Center Campaign

Last week, the Chairman of the Senate Finance Committee, Senator Max Baucus, sent a letter to IRS Commissioner Doug Shulman “request[ing] that you and your agency survey major 501(c)(4), (c)(5), and (c)(6) organizations involved in political campaign activity to examine whether they are operated for the organization‟s intended tax exempt purpose and to ensure that political campaign activity is not the organization‟s primary activity.” The Baucus letter cited a September 16 Time magazine article that mentioned Crossroads GPS, and media reports noted that Crossroads GPS was among the likely targets of the letter.

Senator Baucus‟ letter was followed this week by a second, largely duplicative letter sent by two pro-Democrat groups that routinely support unconstitutional restrictions on independent political speech, Democracy 21 and the Campaign Legal Center. This second letter “calls on the IRS to conduct an investigation into whether Crossroads GPS . . . is operating in violation of its tax status because it has a primary purpose of participating in political campaigns in support of, or in opposition to, candidates for public office.”

On the very same day that Democracy 21 and the Campaign Legal Center sent its letter to the IRS, the liberal Center for American Progress blog ThinkProgress accused the U.S. Chamber of Commerce of using “foreign corporate money” to fund its political advocacy – a charge that was immediately echoed by MoveOn.org, which called for a criminal investigation against the Chamber (joined by the New York Times editorial page and Senator Al Franken). Also on the same day, the Democratic Congressional Campaign Committee filed a complaint against a third center-right independent advocacy group, the Commission on Hope, Growth and Opportunity, alleging that it had violated federal election laws. And in the same week, New York City Public Advocate Bill de Blasio announced he would continue to use his government position to conduct a pressure campaign to deter companies from supporting political advocacy efforts.

These clearly coordinated efforts – and others that are likely to follow – appear to have little to do with ensuring compliance with our tax and election laws. If they did, the individuals and groups sponsoring them would likely have expressed concern about the hundreds of millions of dollars spent by liberal advocacy groups to help elect Democrats in 2004, 2006 and 2008.