New York Attorney General Eric Schneiderman has expanded an investigation into tax-exempt social welfare groups to see whether they are crossing permissible boundaries from educating the public into influencing national politics, according to officials familiar with the inquiry.
The officials, who spoke on condition of anonymity because the probe has not been publicly announced, said the roughly two-dozen organizations are both pro-Republican and pro-Democrat, and the issue is whether they should qualify for tax-exempt status.
Under state law and regulations, any organization that gets $25,000 in annual donations from New York sources is required to register with the attorney general’s Charities Bureau. That is the basis for the information requests the past several weeks.
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They were sent to groups ranging from the Alliance for Retired Americans Educational Fund in Washington, D.C., which says its role is “educating on public policy issues that affect retirees,” to Americans for Limited Government in Fairfax, Va., which says it is “committed to advancing free-market reforms, private property rights and core American liberties.”
Calls to both groups were not immediately returned Thursday.
The officials said it was unclear with some organizations how much their educational role actually exists compared to their political role, and that Schneiderman didn’t want to wait for the slower-moving IRS and Federal Election Commission to act. They declined Thursday to name all the groups from which information was requested.
The New York Times reported earlier Thursday that others are the Republican-affiliated groups Crossroads Grassroots Policy Strategies, American Action Network and American Future Fund, as well as Democratic groups Priorities USA Action, Patriot Majority USA and America Votes.
The IRS says provision 501(c)(4) of the tax code provides for exemption of civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare that are “primarily engaged in promoting in some way the common good and general welfare of the community.” In 2003 instructions, the agency said that is a “catch-all” provision for “presumptively beneficial” nonprofits that don’t fit into its other categories, also noting that “social welfare” is difficult to define precisely.
The IRS said contributions are generally not deductible by donors.
