Crossroads GPS is a social welfare organization?

[USincognito]

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The topic of this thread is Crossroads GPS and is it a social welfare organization or not. I don't want to see a bunch of "What about George Soros?" and "Koch Brothers!". I'd like to see if we can, for once, have an adult, on topic discussion here and will be reporting off-topic posts.

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While reading up on the charges against Lois Lerner, I was stunned to learn earlier tonight that Crossroads GPS is a 501(c)(4) social welfare organization.
Crossroads GPS At Heart Of GOP's Lois Lerner Probe : It's All Politics : NPR

So. Let's set out the field before playing ball. The law for 501(c)(4) states that they must be exclusively dedicated to social welfare. The IRS regulation, however was changed to primarily dedicated to social welfare which has come to mean 51% of funds and/or activities.

Here is some examples of groups that the IRS considers their primary activity to be social welfare:
Social Welfare Organizations - Examples

Social Welfare Organizations - Examples

Some nonprofit organi[bless and do not curse]zations that qualify as social welfare organiza[bless and do not curse]tions include:

•An organization operating an airport that serves the general public in an area with no other airport and that is on land owned by a local government, which supervises the airport’s operation,
•A community association that works to improve public services, housing and resi[bless and do not curse]dential parking; publishes a free commu[bless and do not curse]nity newspaper; sponsors a community sports league, holiday programs and meetings; and contracts with a private se[bless and do not curse]curity service to patrol the community,
•A community association devoted to preserving the community’s traditions, ar[bless and do not curse]chitecture and appearance by represent[bless and do not curse]ing it before the local legislature and administrative agencies in zoning, traffic and parking matters,
•An organization that tries to encourage in[bless and do not curse]dustrial development and relieve unem[bless and do not curse]ployment in an area by making loans to businesses so they will relocate to the area and
•An organization that holds an annual festi[bless and do not curse]val of regional customs and traditions.​

More general guidance is offered here (and note the use of the word "exclusively":
http://www.irs.gov/Charities-&-Non-...f-Organizations-Exempt-under-Section-501(c)(4)

Types of Organizations Exempt under Section 501(c)(4)

Internal Revenue Code section 501(c)(4) provides for the exemption of two very different types of organizations with their own distinct qualification requirements. They are:

•Social welfare organizations: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, and
•Local associations of employees, the membership of which is limited to the employees of designated person(s) in a particular municipality, and the net earnings of which are devoted exclusively for the promotion of social welfare.​

The general guidelines are local, and exclusively promoted to social welfare like volunteer fire departments, PTAs, park beautification committees, etc.

Now let's look at Crossroads GPS. From the above link:

Crossroads GPS, like other large tax-exempt groups, has been funded primarily by wealthy donors. An NPR analysis of its tax returns shows that $218 million of the $257 million the group has raised to date has come in donations of $1 million or more. One single donation in 2012 was $22.5 million, and another was $18 million.

Tax-exempt groups are allowed to engage in some political activity, as long as it does not become their primary purpose. Crossroads GPS reported spending $71 million directly on political activity, out of the $180 million it reported raising in 2012. The group spent an additional $94 million on ads that attacked President Obama and Democratic congressional candidates but did not specifically mention the election.

Crossroads GPS also donated $35 million to other nonprofit groups, including some that turned around and spent some of their money on political activity. The group, for instance, reported giving Grover Norquist's Americans for Tax Reform $26.4 million — an amount that makes up the vast majority of the $31 million Americans for Tax Reform reported raising in 2012. Americans for Tax Reform that year reported spending $15.8 million on political activity.​

So we're looking at ~40% directly on political activity and about 52% on partisan activity that was (wink wink) not directly related to the election (wink wink). But when you start adding in donations to other groups like AfTR that spend $15.8 million directly on political activity, they money Crossroads GPS winds up spending well above the 48% threshold for "primarily".

There are plenty of other organizations that play fast and loose with 501(c)(4) status, but Crossroads GPS is in the news because of Ms. Lerner and emblematic, I think, of the corrosive influence of dark money on elections.

 

[stamperben]

Crossroads is clearly political and even three blind mice can see that.

 

[MachZer0]

From the IRS:

Action Organizations

Seeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its sole or primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax . For more information, see Lobbying Issues .

 

[GarfieldJL]

From the IRS:

Action Organizations

Seeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its sole or primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax . For more information, see Lobbying Issues .

You beat me in pointing this out, USincognito there is a difference between what 501(c)(3)'s are allowed to do and what 501(c)(4)'s are allowed to do.

 

[cow451]

It's a PAC. All PAC's are worthy of being flown nose first into the Indian Ocean.

 

[GarfieldJL]

It's a PAC. All PAC's are worthy of being flown nose first into the Indian Ocean.

At least PACs are honest about the fact they are involved in politics, some left-wing 501(c)(3)'s need to lose their tax exempt status because they are engaging in highly partisan behavior yet they claim they are a 501(c)(3) on their tax returns.

 

[cow451]

At least PACs are honest about the fact they are involved in politics, some left-wing 501(c)(3)'s need to lose their tax exempt status because they are engaging in highly partisan behavior yet they claim they are a 501(c)(3) on their tax returns.

I would revoke the tax-exempt status for every PAC. Talk about a windfall deficit reducer! I'd tax every political campaign for all money raised over $5,000,000.

 

[variant]

For tax purposes that is what they pretend to be.

 

[MikeCarra]

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The topic of this thread is Crossroads GPS and is it a social welfare organization or not.

It's like an afterschool program only it keeps Karl Rove off the streets where he'd be doing more damage to people on an individual basis.

 

[GarfieldJL]

I would revoke the tax-exempt status for every PAC. Talk about a windfall deficit reducer! I'd tax every political campaign for all money raised over $5,000,000.

That would be double taxation, because the donations to 501(c)(4)'s unlike donations to 501(c)(3)'s can't be written off on your taxes...

501(c)(4)'s are considered tax-exempt because the money has already been taxed before it was donated. So in effect you would be taxing people for exercising their 1st Amendment rights.

 

[USincognito]

Action Organizations

Seeeking legislation germane to the organization's programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its sole or primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax . For more information, see Lobbying Issues .

I've bolded the part you seem to overlook. Action Organizations aren't allowed to be PACs. They are allowed to operate purely as lobbying organizations - within the context of the mission that accorded them (c)(4) status to begin with. For example, if I found "The Committee for Dallas Park Beautification" my group doesn't have to spend money directly on parks in Dallas. We can spend all of our money lobbying every entity from Congress to City Hall, but only to get funds or legislation for beautification of parks within Dallas.

Further, how does contributing to campaigns or running "non-partisan" attack ads constitute "seeking legislation" unless one expects a quid pro quo once the candidate you're "not supporting" is elected?

And my example again points to a big problem with these ersatz (c)(4)s operating on a national level. In the description of what constitutes a social welfare organization:
Social Welfare Organizations
you'll not the emphasis, again, on community a a geographical constraint and how social welfare organizations are supposed to help the entire community and cannot exclude members of said community.

To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify as a section 501(c)(4) organization. Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, because its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization.​

So please. Explain to me how Crossroads GPS is promoting social welfare for an entire community.

 

[GarfieldJL]

Again why should someone be taxed twice for the same paycheck? You can't write off 501(c)(4) donations on your taxes.

What you are advocating is an attempt to silence free speech, USincognito.

 

[USincognito]

You beat me in pointing this out, USincognito there is a difference between what 501(c)(3)'s are allowed to do and what 501(c)(4)'s are allowed to do.

Why don't you reread my OP and read post #11 and get back to me.

At least PACs are honest about the fact they are involved in politics, some left-wing 501(c)(3)'s need to lose their tax exempt status because they are engaging in highly partisan behavior yet they claim they are a 501(c)(3) on their tax returns.

501(c)(3)'s are not the topic of this thread. Let's keep it focused on (c)(4)'s and Crossroads GPS please.

I would revoke the tax-exempt status for every PAC. Talk about a windfall deficit reducer! I'd tax every political campaign for all money raised over $5,000,000.

Again, let's keep this focused on (c)(4)'s and specifically Crossroads GPS.

It's like an afterschool program only it keeps Karl Rove off the streets where he'd be doing more damage to people on an individual basis.

Dude. Come on.

 

[USincognito]

Again why should someone be taxed twice for the same paycheck? You can't write off 501(c)(4) donations on your taxes.

Please quote me where I have suggested making 501(c)(4) organizations pay taxes or whatever it is you're suggesting.

What you are advocating is an attempt to silence free speech, USincognito.

:o What in gehenna are you talking about?

 

[USincognito]

That would be double taxation, because the donations to 501(c)(4)'s unlike donations to 501(c)(3)'s can't be written off on your taxes...

501(c)(4)'s are considered tax-exempt because the money has already been taxed before it was donated. So in effect you would be taxing people for exercising their 1st Amendment rights.

I don't know what you're reading in this thread, but it can't be my posts. The question, and I think it was pretty clearly raised in both the thread title and my OP is - is Crossroads GPS a social welfare organization or not.

 

[GarfieldJL]

Please quote me where I have suggested making 501(c)(4) organizations pay taxes or whatever it is you're suggesting.

Crossroads GPS is a 501(c)(4) and they actually lobby over policy issues, not political campaigns... Donations to Crossroads GPS is not tax deductable so if the donations were taxed, then you would be taxing people twice...

American Crossroads is the organization that does political campaigns and they are a 527.

:o What in gehenna are you talking about?

Maybe you should look at your original post and subsequent posts that you have made in this topic...

 

[USincognito]

Please quote me where I have suggested making 501(c)(4) organizations pay taxes or whatever it is you're suggesting.

Crossroads GPS is a 501(c)(4) and they actually lobby over policy issues, not political campaigns... Donations to Crossroads GPS is not tax deductable so if the donations were taxed, then you would be taxing people twice...

American Crossroads is the organization that does political campaigns and they are a 527.

I love when people not only don't answer my question, but act like they are informing me of something about which I already knew.

What do national policy issues have to do with local social welfare and since advocacy is supposed to be for all citizens, how does advocating for one particular policy viewpoint serve all citizens? How exactly are running "issues" attack ads advocacting for social welfare? How does donating millions of dollars to Americans for Prosperity so it can engage in political activity encourage social welfare as defined by the IRS?

Some nonprofit organizations that qualify as social welfare organizations include:

An organization operating an airport that serves the general public in an area with no other airport and that is on land owned by a local government, which supervises the airport’s operation,
A community association that works to improve public services, housing and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs and meetings; and contracts with a private security service to patrol the community,
A community association devoted to preserving the community’s traditions, architecture and appearance by representing it before the local legislature and administrative agencies in zoning, traffic and parking matters,
An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area and
An organization that holds an annual festival of regional customs and traditions.​

I'd note, again, that lobbying is only supposed to be done within the context of the organizations agenda (see my Committee for Dallas Park Beautification example above).
Again, I have no idea how you got it into your brain that I want to tax (c)(4) organizations so this comment is out of left field.
Crossroads GPS is a 527 in my opinion. But, whatever it is, it sure as heck isn't a 501(c)(4) according to the IRS regulations and guidelines.

:o What in gehenna are you talking about?

Maybe you should look at your original post and subsequent posts that you have made in this topic...

Since I remember quite well what I have written over the last 18 hours or so, and nowhere in what I have written am I advocating an attempt to silence free speech, I have to ask again. What in gehenna are you talking about?

 

[MachZer0]

I've bolded the part you seem to overlook. Action Organizations aren't allowed to be PACs. They are allowed to operate purely as lobbying organizations - within the context of the mission that accorded them (c)(4) status to begin with. For example, if I found "The Committee for Dallas Park Beautification" my group doesn't have to spend money directly on parks in Dallas. We can spend all of our money lobbying every entity from Congress to City Hall, but only to get funds or legislation for beautification of parks within Dallas.

Further, how does contributing to campaigns or running "non-partisan" attack ads constitute "seeking legislation" unless one expects a quid pro quo once the candidate you're "not supporting" is elected?

And my example again points to a big problem with these ersatz (c)(4)s operating on a national level. In the description of what constitutes a social welfare organization:
Social Welfare Organizations
you'll not the emphasis, again, on community a a geographical constraint and how social welfare organizations are supposed to help the entire community and cannot exclude members of said community.

To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify as a section 501(c)(4) organization. Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, because its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization.​

So please. Explain to me how Crossroads GPS is promoting social welfare for an entire community.

Crossroads GPS:

"We believe that when you scratch below the surface, most Americans want the same things: a broadly prosperous economy, better opportunities for our kids, retirement security and high-quality, affordable health care."

As a 501(c)(4) organization, they are allowed to seek legislation germane to the organization's goals, and, as a section 501(c)(4) social welfare organization may further their exempt purposes through lobbying as its sole or primary activity without jeopardizing their exempt status.

The fact that you may disagree with them as to the best way achieve those goals does not affect their tax free status

 

[GarfieldJL]

I love when people not only don't answer my question, but act like they are informing me of something about which I already knew.

I pointed out your question was looking for an answer that would be misleading.

Crossroads GPS isn't exactly a PAC, they deal with policy issues which is what a 501(c)(4) is allowed to do.

You're confusing American Crossroads (a 527) with Crossroads GPS.

 

[USincognito]

Crossroads GPS:

"We believe that when you scratch below the surface, most Americans want the same things: a broadly prosperous economy, better opportunities for our kids, retirement security and high-quality, affordable health care."

Here, let try highlighting this time:

To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify as a section 501(c)(4) organization. Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, because its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization.​

"We believe that when you scratch below the surface, most Americans want the same things: a broadly prosperous economy, better opportunities for our kids, retirement security and high-quality, affordable health care."
"We have discovered that most people support action on these issues, so we call it the New Majority Agenda, and you can read all about it here."
"If you share that vision, please check out the New Majority Agenda, sign up for our updates, fire off some letters and emails to the White House and Congress, tell your friends, and help write some brighter chapters in the history of America."

As a 501(c)(4) organization, they are allowed to seek legislation germane to the organization's goals, and, as a section 501(c)(4) social welfare organization may further their exempt purposes through lobbying as its sole or primary activity without jeopardizing their exempt status.

Yeah, I already addressed the context into which the lobbying has to fall in order to be considered acceptable under (c)(4) status.

The fact that you may disagree with them as to the best way achieve those goals does not affect their tax free status

I don't disagree with them per se. I disagree that their organization is exclusively dedicated to social welfare as defined by the numerous quotes from the IRS website I have provided (in fact examples were quoted in the very message to which you responded.