A burgeoning scandal that threatens to undermine President Barack Obama's second-term agenda mushroomed over the targeting of grandmothers like Marion Bower, who counts an annual garage sale as one of her local Tea Party group's biggest fundraisers.
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What is a 501 (c) 4?
A 501 (c) 4 is a social welfare organization as defined by the Internal Revenue Code. Under federal law it must not be organized for profit and must operate primarily to further the common good and general welfare of the people of the community. Political organizations have also used 501 c (3) organizations, which are for charitable purposes.
Are the use of 501 (c) groups' involvement in elections new?
No. Bill Allison of the Sunlight Foundation dates use of such organizations for political purposes back to a 1996 "get out of the vote effort" organized by Democrat Harold Ickes, a senior adviser in the Clinton administration. But recent court decisions have helped pave the way for more groups to apply for tax exempt status in order to garner donations that aren't publicly disclosed.
When are 501 (c) 4 organizations not allowed to intervene in political campaigns?
According to the IRS: "The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. In general: As long as 51 percent of the work done by the organization is not political, it usually gets a pass.
Source: The IRS and Sunlight Foundation
Jan. 26, 2012: The Ohio Liberty Council, a conservative organization seeking tax-exempt status, receives a letter from the IRS asking more than 30 questions about the organization, including Facebook status and whether board members or their families had ever or would ever run for public office.
March 7, 2012: The New York Times writes an editorial saying that "taxpayers should be encouraged by complaints from Tea Party chapters applying for nonprofit tax status at being asked by the Internal Revenue Service to prove they are ‘social welfare' organizations and not the political activists they so obviously are."
March 14, 2012: Sen. Rob Portman, R-Ohio, and 11 other Republican senators write IRS Commissioner Doug Shulman asking if the agency is targeting conservative organizations who are seeking tax-exempt status.
March 27, 2012: Rep. Jim Jordan, R-Urbana signs a letter to the IRS asking many of the same questions Portman had asked.
April 26, 2012: Steven Miller, then the deputy IRS commissioner, writes Portman to assure that "there have been no communications between IRS employees and the Department of the Treasury and the White House with respect to requests for donor information from any 501 (c) (4) applicant organizations.''
May 2012: IRS officials tell Miller that some conservative organizations have been unfairly singled out.
April 22, 2013: White House counsel's office is notified of the IRS targeting of conservative organizations.
May 10, 2013: IRS official Lois Lerner tells a conference in Washington that low-level employees in the agency's Cincinnati office had focused extra scrutiny on conservative organizations.
May 13, 2013: President Barack Obama tells reporters at a news conference that he first "learned about'' the IRS targeting conservative groups on May 10 "from the same news reports that I think most people learned about this.''
May 14, 2013: A Treasury Department's Inspector General audit declares that the IRS "used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status.''
May 15, 2013: Obama announces that Miller has resigned his post as acting IRS commissioner.
May 16, 2013: At a news conference a reporter asks Obama if he could "assure the American people that nobody in the White House knew about the agency's actions before your counsel's office found on April 22?'' Obama replies that he could "assure you that I certainly did not knowing anything about the (inspector general's) report before the IG report had been leaked to the press.''