The IRS Scandal II

Ok, a little more information is starting to come out and I'm a tad confused.

The issue at hand appears to be the review of applications for 501(c)(4) tax exempt status. But it's not only a tax exemption, it's the right to not have to reveal the people who donate to the organization.

There are two types of groups covered under 501(c)(4). The first are "Social Welfare" groups and the second are "Local associations of employees." In this particular case it's the "Social Welfare" groups that appear to be the issue.

These are groups that, according to the IRS code, are "Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare."

Such groups may engage in political activities as long as (a) that is not the groups primary activity and (b) the groups activities does not "include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public of­fice."

Well that's clear as mud. But it gets better. The code goes on to say "if an or­ganization is organized exclusively to promote social welfare, it may still obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office."

In other words, they can't participate directly in a candidates campaign but they may still engage in political activity on behalf of, or in opposition to, candidates they feel promote or don't promote whatever "Social Welfare" they're involved with?

You have got to be shitting me?

So why wouldn't the IRS take a really close look at groups whose names implied political partisanship?

I guess the big question here is what was the criteria for extra scrutiny and was that criteria biased?