Van Hollen Lawsuit Challenges IRS Rules for 501(c)(4) Organizations

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Rep. Chris Van Hollen (D-Md.) and campaign reform groups filed a lawsuit Aug. 21 asking a federal court to invalidate Internal Revenue Service rules allowing Section 501(c)(4) tax-exempt organizations to engage in politics (Van Hollen v. IRS, D.D.C., No. 1:13-cv-01276, complaint filed 8/21/13).
“The IRS has not enforced section 501(c)(4)'s requirement that a tax-exempt organization be operated ‘exclusively’ to promote social welfare,” said the complaint filed in the U.S. District Court for the District of Columbia. “Instead, contrary to the plain meaning of the statute, the IRS has permitted section 501(c)(4) organizations to engage in substantial activity that does not qualify as promotion of social welfare, including election campaign intervention.”
Filing of the lawsuit had been planned for months but was held up due to the controversy over IRS targeting of certain 501(c)(4) groups for extra scrutiny because their names indicated they were involved in political activity, Van Hollen said in an Aug. 21 telephone news conference.

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