An organization's expenditures are not the only factor used by the IRS when determining its nonprofit status. The IRS has an obligation to determine if the organization primarily deals with "social welfare" before it awards it with a 501 (c)(4) tax code. In order to accomplish this task additional questions must be asked. For example , if an organization spends little, but uses volunteers to promote a candidate it will be rejected.
When CVFC, a conservative veterans’ group in California, applied for tax-exempt status with the Internal Revenue Service, its biggest expenditure that year was several thousand dollars in radio ads backing a Republican candidate for Congress.
The Wetumpka Tea Party, from Alabama, sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama” while the I.R.S. was weighing its application.
And the head of the Ohio Liberty Coalition, whose application languished with the I.R.S. for more than two years, sent out e-mails to members about Mitt Romney campaign events and organized members to distribute Mr. Romney’s presidential campaign literature.
Representatives of these organizations have cried foul in recent weeks about their treatment by the I.R.S., saying they were among dozens of conservative groups unfairly targeted by the agency, harassed with inappropriate questionnaires and put off for months or years as the agency delayed decisions on their applications.
But a close examination of these groups and others reveals an array of election activities that tax experts and former I.R.S. officials said would provide a legitimate basis for flagging them for closer review.
“Money is not the only thing that matters,” said Donald B. Tobin, a former lawyer with the Justice Department’s tax division who is a law professor at Ohio State University. “While some of the I.R.S. questions may have been overbroad, you can look at some of these groups and understand why these questions were being aske.
Groups Targeted by I.R.S. Tested Rules on Politics