Report from the New York Times this afternoon:
In a complaint filed this week with the Internal Revenue Service, lawyers for the Democratic Congressional Campaign Committee charged that the group, the Americans for Prosperity Foundation, has been running ads in Kansas, Missouri and Michigan that are inherently “political in nature,” contravening a ban under federal tax law. A copy of the complaint was provided to The New York Times.
The foundation, which has just begun a $1.4 million ad campaign criticizing the economic policies in Washington as “wasteful spending,” has become a vocal critic of Democratic policies and drew a rebuke this month from President Obama.
Non-profit groups like the foundation, which falls under section 501(c)3 of the tax code, are forbidden from participating in “any political campaign on behalf of or in opposition to a candidate.” They may, however, seek to educate voters or conduct broader get-out-the-vote drives “if conducted in a non-partisan manner,” the I.R.S. says.
Their tax-exempt status is crucial to the income of such groups, because it allows donors to take an income-tax deduction for contributions. Americans for Prosperity, which called the complaint without merit, said it had raised money from 70,000 individual donors.
The Democrats’ complaint cites four political ads that the group has been running in Michigan, Missouri, and Kansas. The ads do not mention specific politicians by name, but they mount a broad attack on federal policies and initiatives like the “pork barrel” spending in the $862 billion stimulus plan and the new health care law, which the group says has imposed unfair burdens on small business owners.
