Over $4 billion will be spent in campaign ads. Depending on whether it is taxed or not, will depends on a gray area decision: are these ads political.
These ads are called 501(c)(4) based on the classification in the IRS Code that deals with them….. the tax-exempt status under IRC 501(c)(4) of civic leagues, social welfare organizations, and local associations of employees…..
Local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality and the net earnings of which are devoted exclusively to charitable,
educational, or recreational purposes……..
These exemptions were sought after and got… by the US Chamber of Commerce when the Tariff Act was voted upon 99 years ago in 1913.
An organization that primarily benefits a private group of citizens cannot qualify for IRC 501(c)(4) exempt status. A political party is a private group of citizens. This line of code gives the IRS the right to disqualify any group sponsoring any political ad that can be reasonably deemed to be pro one party or another. It would not affect something like Clint Eastwood’s Superbowl Commercial, although Republicans always afraid of truth, tried to spin that as a Democratic campaign commercial.
In Erie Endowment v. United States, 316 F.2d 151, 156 (2d Cir. 1963), the court, in defining a civic organization, summed up the matter by stating that “the organization must be a community movement designed to accomplish community ends.”
The ad depicting Obama leaking secrets… does not accomplish community ends. The ad correctly depicting Mitt Romney killing a man’s wife by driving head on into a Bishop’s car, … does not accomplish community ends…. Both should be taxed….
The IRS is currently deciding. It will be called out unfairly no matter what its decision will be…
It has the duty to follow the law. If Republicans disagree with the decision, whenever they get enough Republicans inside the Senate to make a change, they may change the law. If Democrats disagree with the decision, whenever they get enough Democrats inside the House to make a change, they… may change the law….
The IRS does not have that option. Their option is to uphold the law... And there is no way, no person unbiased, can realistically say political action advertising, is within the realms of the definition of tax free organizations…..
So, Doug Shulman? Tax them.