Here's a good primer from the Washington Post. It answers basic questions about the case so far.
Summary info:
- A 501 (c)(4) is a subset of the groups that fit under the IRS's tax code for nonprofit groups. Wikipedia has a page detailing all of the 501(c) categories that exist. The 4th category is reserved for "Civic Leagues, Social Welfare Organizations, and Local Associations of Employees." These have proliferated since the Citizens United decision of 2010.
- Since they are supposed to be social welfare organizations, politics is not supposed to be their primary focus. They are to spend less than 50% of their money on politics. The trick is determining what that means. What is "politics" and what is "social welfare?" And who gets to make that determination?
- Many of the most groups most active in the recent election fell under this categorym including Crossroads GPS and Organizing for Action.
- The Center for Responsive Politics thes groups spent more than $300 million on the campaign. $263 million by conservative groups and $35 million by liberal groups. 501(c)(4)'s spend more on the campaign than super PACs by a 3-2 margin.
- A super PAC has to disclose its donors while a 501(C)(4) does not. This explains their appeal.
- Applications for these organizations doubled following the Supreme Court's Citizens United decision which allowed corporations and labor unions to spend as much money as they wish on elections.
- The IRS used key terms - like Tea Party - to flag certain groups it suspected of not qualifying as social welfare organizations.
- The Inspector General is set to release an audit of the process, and at least two House congressional committees are planning to investigate this.
