The difference between a 501(c)3 and a 501(c)4 ?
If the IRS did not find anyone to prosecute that was abusing these tax structures, then they were not doing their jobs. Dick Armey's organization comes to mind.
Now they want the IRS investigated. And they should be. Why didn't they do their job? It was rather obvious that many of these organizations were not adhering to the rule of the law.
Yes, call them before a committee for an explanation.
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http://www.nj.com/helpinghands/nonprofitknowhow/index.ssf/2008/07/the_difference_between_501c3_a.html
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According to the Internal Revenue Service Code, 501(c)(3) and 501(c)(4) organizations are nonprofit organizations that are exempt from paying federal income tax. 501(c)(3) organizations are either a public charity, private foundation or private operating foundation with open membership whereas 501(c)(4) organizations are civic leagues or associations operated exclusively for the promotion of social welfare or local associations of employees with limited membership.
When it comes to lobbying and political activity, 501(c)(3) organizations can appeal directly to legislative bodies and representatives and may support issue-based legislation. However, they must notify the IRS of their intent to lobby by filing form 5768, which formally informs the federal government that one has elected to use the expenditure test to have the organization's lobbying activity measured. Under this test, lobbying capacity is typically limited to spending less than 5 to 20% of the organizational budget on lobbying activities, depending on the size of your organization.
501(c)(4) organizations can engage in unlimited lobbying so long as it pertains to the organization's mission. 501(c)(3) organizations are not permitted to engage in political activity, endorse or oppose political candidates, or donate money or time to political campaigns, but 501(c)(4) organizations can do all of the above.
In regards to supporting these organizations, donations made to 501(c)(3) organizations are deductible to the full extent of the law as charitable contributions. Donations made to 501(c)(4) organizations are not deductible, though some businesses who make these contributions often write them off as advertising or business expenses. (Please consult your accountant.)
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