Watchdog groups take aim at Crossroads GPS, Priorities USA

Campaign finance watchdog groups Wednesday challenged the tax-exempt eligibility of several nonprofit political organizations.

In a letter to the IRS, Democracy 21 and the Campaign Legal Center called for an investigation into four groups that have 501(c)(4) tax status and are engaged in political activity: Crossroads GPS, Priorities USA, American Action Network and Americans Elect.

They argue that the political organizations’ primary purpose is not social welfare — and thus they should not be afforded nonprofit status.

“The IRS should conduct an investigation of whether each such organization has engaged in more than an insubstantial amount of non-exempt activity by participating or intervening in political campaigns, and accordingly is not primarily engaged in the promotion of social welfare,” the groups wrote in their letter. “The IRS should also conduct an investigation of whether each organization’s primary activity is campaign activity, and is accordingly not primarily engaged in the promotion of social welfare.”

The letter was signed by Fred Wertheimer, president of Democracy 21, and J. Gerald Herbert, executive director of the Campaign Legal Center.

A representative for one of the targeted groups called the complaint “frivolous.”

“This is the fourth frivolous complaint in 12 months from a highly ideological group that wants to sic the IRS on its opponents,” Crossroads spokesman Jonathan Collegio said.

A spokesman for another group said they were in compliance with the law.

"Our organization operates in compliance with all federal rules and regulations enforced by the IRS," said Bill Burton, senior strategist for Priorities USA.

The outside spending groups in question sponsored several campaign ads last election and some this election cycle, with plans to do more.

Crossroads, which former Bush adviser Karl Rove helped launch, has favored Republican candidates while Priorities USA was created this year by Burton, a former White House deputy press secretary, in support of President Obama’s reelection bid.

-- This story was updated at 3:38 p.m.

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