The federal tax agency is reportedly checking up to see whether "social welfare" groups, exempt from tax under section 501(c)(4) of the tax code, are really that, or just political action committees by another name -- especially since the 501(c)(4)'s can keep their donors secret, while PACs can't. The Tea Party groups that have been contacted are screaming discrimination, but even The New York Times thinks it's time that these organizations, all across the political spectrum, are reformed.

The Huffy had a piece on this on Friday, and another one on March 1, and we found these passages pretty interesting:

The tea party was first widely emblazoned on the public's mind for their noisy opposition to President Barack Obama's health care overhaul at congressional town hall meetings in the summer of 2009. Support from its activist members has since helped nominate and elect conservative candidates around the country, though group leaders say they are chiefly educational organizations.

They say they mostly do things like invite guests to discuss issues and teach members about the Constitution and how to request government documents under the Freedom of Information Act. Some say they occasionally endorse candidates and seek to register voters.

"We're doing nothing more than what the average citizen does in getting involved," said Phil Rapp, executive director of the Richmond Tea Party in Virginia. "We're not supporting candidates; we are supporting what we see as the issues."...

The tax code requires 501(c)(4) groups to be operated "exclusively" for social welfare purposes -- which does not include intervention in political campaigns. The IRS has allowed the groups to engage in political activity as long as it was not their primary purpose. But for many of these groups, it's hard to see what other purpose they could possibly have.

It's also hard to see why a political group would file under section 501(c)(4) instead of under Section 527 -- the part of the tax code explicitly designed for political groups including PACs and super PACs -- other than to hide its donors. Like the C4s, the 527 groups are allowed to raise unlimited funds and pay no taxes. They just have to disclose who donates money.

Hmmmmm... 501(c)(4)... associated with a particular candidate... same office address as his campaign office... says it's "getting out the vote"... think it's worth the IRS taking a look?