ICYMI: Congresswoman Lujan Grisham Letter to the Editor of the ‘Washington Post’ on 501(c)(4) Reform Act

IN CASE YOU MISSED IT: Congresswoman Michelle Lujan Grisham (NM-01), a member of the House Committee on Oversight & Government Reform, has written a letter to the editor of the Washington Post in response to an op-ed by Republican Congressmen Darrell Issa and Dave Camp. The letter, which appeared in the Saturday, August 10, newspaper, is below:

Keeping politics out of social welfare organizations

Congresswoman Michelle Lujan Grisham

Congresswoman Michelle Lujan Grisham

After reading their Aug. 7 op-ed “Holes in the IRS narrative,” I was disappointed that Reps. Darrell Issa and Dave Camp failed to mention the most glaring hole: The gap between federal law and Internal Revenue Service regulation. Federal law requires tax-exempt social welfare organizations to operate “exclusively for the promotion of social welfare.” However, an IRS regulation allows these groups to be only “primarily” engaged in promoting social welfare. This inconsistency creates a loophole that allows tax-exempt social welfare organizations to spend millions of dollars on campaign activities while keeping their donors secret.

The underlying problem that contributed to the improper scrutiny of tax-exempt groups remains unsolved. IRS bureaucrats are still trying to determine whether social welfare organizations are engaging in too much political activity, based on a vague evaluation of the “facts and circumstances.” The American people want solutions, not more political bickering. I have introducedThe 501(c)(4) Reform Act,” which would help ensure that political campaign spending is transparent and that tax-exempt social welfare organizations do not engage in any political campaign activity, as federal law requires. Instead of just talking about the inconsistencies, let’s solve this problem and close this loophole.

Michelle Lujan Grisham


Under the 501(c)(4) Reform Act, tax-exempt social welfare organizations would have to follow the same restrictions on campaign activity that govern charities. They would have to set up a separate political action committee (PAC), and donations to that PAC would have to be disclosed in accordance with federal campaign finance law. The legislation will also help streamline the application process for 501(c)(4) status – not only for groups applying for tax-exempt status, but also for IRS employees reviewing applications.

For more information on Congresswoman Lujan Grisham’s 501(c)(4) Reform Act, click HERE.

An Albuquerque Journal article on the 501(c)(4) Reform Act can be found HERE.