Campaign Disclosure and Tax-Exempt Entities: A Quick Repair to the Regulatory Plumbing

Abstract

This article argues that the are some quick regulatory fixes the Treasury can implement to ensure that tax-exempt organizations (especially 501(c)(4) social welfare organizations) are operating within the rules and that aggressive tax planning is not being used as a way to obfuscate rules designed to require disclosure of contributions and expenditures of political organizations. The article recommends that Treasury promulgate new regulations to require disclosure of contributions and expenditures in excess of $25,000 by tax-exempt entities. The article also proposes that Treasury institute procedures to require tax-exempt organizations to file for exempt status, and to provide procedures for ensuring that these organizations meet the requirements in the statute and are not being used as a mechanism to avoid disclosure provisions in the Internal Revenue Code.