Tuesday, April 19, 2016

From the Center for Responsive Politics: How Crossroads GPS beat the IRS and became a social welfare group

Here's how a political organization can become officially recognized as a social welfare organization.

- Click here for the article.

When a group called Crossroads GPS sent the IRS an application for tax-exempt status in September 2010, Nancy Pelosi was speaker of the House, Snapchat hadn’t started doing whatever it does, and Miley Cyrus was still Hannah Montana.

A lot has changed since then, including the political influence of 501(c)(4) social welfare organizations like GPS, a brainchild of Karl Rove, Ed Gillespie and other GOP political operatives that was an early player in the post-Citizens United landscape. For example, in the 10 years leading up to that date, the combined political spending by organizations, like GPS, that aren’t required to disclose their donors stood at about $100 million. That was about $30 million less than was ultimately spent by such groups in the last few months of the 2010 midterms alone, and less than one-third of what they spent in the 2012 presidential election cycle. In that cycle, GPS’ political outlays alone made up nearly one-fourth of all spending by nondisclosing groups, as reported to the Federal Election Commission. None of those totals include the many ads GPS has run
outside of the FEC’s reporting windows.

But while Crossroads GPS was, well, the elephant in the room when it came to fueling the growth of “dark money” spending in elections, it struggled more than almost any other big political spender, liberal or conservative, to convince the IRS that it was in the business of social welfare, not politics.

But as OpenSecrets Blog
first reported Tuesday, that long battle with the IRS finally ended last November, assuring prospective donors that the group is operating with the IRS’ blessing.

The decision has shocked many observers, though not Crossroads GPS itself, whose president Steven Law said the group was “pleased but not surprised
.”

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