It’s Fix the Tax Code Friday!
In the last presidential election, we heard quite a bit about the so-called 527 organizations like “Swift Boats for Truth”. To recap, 527 organizations are named after 26 U.S.C. § 527 – basically section 527 of the Tax Code (the Tax Code is Title 26). Generally, tax exempt organizations are not allowed to participate in significant political activities. Yet, a 527 organization has as its purpose to influence the nomination, election, appointment or defeat of candidates for public office. Further, they are not regulated by the Federal Election Commission and are not subject to the same contribution limits as PACs.
527 organizations are garnering a lot of attention again (of course, it’s election time!) – especially in my home city of Philadelphia. In the midst of our mayoral primary (which, to be honest is really the mayoral race – Republican candidates rarely have a chance in Philly), 527s have moved into the spotlight. A key campaign operative for Democratic party machine favorite Robert Brady quit in April after acknowledging he had been working to create committees to attack fellow candidate Tom Knox while working for Brady. This is a violation of one of the few rules that actually govern 527 organizations: such committees cannot be coordinated by the candidates or committees affiliated with the candidates.
Another 527 organization, Working People for Truth, set up by Donald Dinan has also surfaced to attack Knox. You can read more about it as reported by the Philadelphia Inquirer here.
All of this drama brings me to today’s Fix the Tax Code Friday question:
Should 527 organizations be allowed to attack political candidates and remain tax exempt?
Yeah, so if a church attacks a specific candidate, the IRS (as the behest of the anonymous tipper calling from the opposing party’s local headquarters) is all over them. And rightfully so. I don’t see a difference here.