Groups Use Tax Code to Sidestep Election Law
Seeking to avoid donor disclosure requirements under federal election law, a number of nonprofit political groups are looking to federal tax law. By setting up as a slightly different kind of nonprofit organization, they can avoid disclosing the names of donors, except to the Internal Revenue Service.
As the Washington Post explains: “Several political organizations colloquially known as 527s are relying more on or switching into 501(c)(4) groups, the type of tax-exempt entity that the tax code uses for advocacy groups. The 527s must disclose who gives them money; 501(c)(4)s do not have that requirement.”