Is Your 501(c)(4) Group in Danger of Losing Its Tax-Exempt Status?

Which 501(c)(4) groups are pushing it when it comes to making election activities their “primary mission”? Groups wishing to maintain their tax-exempt status (and the donor anonymity that accompanies it) have to make sure a majority of their activities don’t qualify as such, but a New York Times analysis reveals that several groups are over the limit:

In the case of the 60 Plus Association, it has spent $3.7 million on television time for express advocacy ads, or more than 86 percent of its total. Tom Kise, a spokesman, challenged the completeness of the advertising figures but also said the organization had spent heavily on grassroots lobbying and other activities that balance out its political spending.

The group has also been filing with the I.R.S. based on a fiscal year, instead of the calendar year, so it may have until July 2011 to get its ledgers in order.

American Future Fund, set up by a cadre of Republican political operatives, has devoted $3 million, or about 56 percent of its television advertising spending, to express advocacy.

Meanwhile, Crossroads GPS and Americans for Job Security have been more conservative, keeping their express advocacy spending on television to roughly 40 percent.

But express advocacy ads — in which a group explicitly says to vote for or against a candidate — the Times reports, aren’t the only sort of political work that the IRS might consider an election activity. Some issue advertisements that groups run close to an election and focus on candidates in tight races are bound to be interpreted as an attempt to influence the outcome of an election as well.

That means that even Crossroads GPS and Americans for Job Security, while below the threshold for express advocacy, could conceivably still be at risk of being determined to be political — not social welfare — organizations, and losing their Section 501 status as a result.