“Because of the increased inventory of applications, this inappropriate criterion was used as a shortcut to centralize similar cases.”
501(c)(4) is a status for social welfare groups, but the IRS has ruled those groups’ primary purpose cannot be political. Those groups also don’t have to disclose their donors, making it an attractive designation for big political groups on both the right and the left.
Treasury’s inspector general for tax administration, in a report released this week, said that ineffective management at the IRS led to the agency using the inappropriate criteria.
The IRS admits the criteria delayed approval for some groups, and the inspector general said that the agency asked for unnecessary information. In all, about 175 of the 470 groups that received extra attention have gotten approval, the IRS said Wednesday.