IRS Denies Tax Exemptions for 3 Advocacy Groups

The Internal Revenue Service has denied requests for tax-exempt status from three nonprofit advocacy organizations, saying the groups are primarily political in nature, writes The New York Times.

The organizations operate “primarily for the benefit of a political party and a private group of individuals, rather than the community as a whole,” the tax agency wrote in letters to the groups.

The entities, created as 501(c)(4) advocacy groups in 2006 and 2007, recruited and trained potential political candidates. Their names, and any indication of which parties they worked with, were redacted in versions of the letters the IRS released last week.

This year the IRS began to investigate whether five donors paid gift taxes on contributions to such groups, which have become increasingly prominent in political campaigns, but the agency recently said it had dropped the investigation pending a larger review of the regulations on 501(c)(4) donations.