Well Lookie Here: 3/28/2012: Judge rules tea party group a PAC, not a nonprofit

[DallasNE]

21. I Still See Loopholes

Even if the Tea Party is required to set up a PAC for its political activity I still don't see where there will be meaningful disclosure if given 501(c)(4) status. They use the c4 as the vehicle to collect donations without disclosure then pass those donations to the PAC where the PAC lists a single donor - the Tea Party organization.

The IRS needs to go back to the language of the law that says the organization must engage exclusively in social welfare activities. That language is clear. The 1959 rewrite is improper at best. As it is, we have the "fog of IRS".

In this case political wars rather than hot wars. Faced with a mountain of work some workers at the IRS devised a way to cut corners to speed up the process. Internal reviews uncovered these shortcuts and they were ordered to end but the review did not understand the underlying cause (a perceived notion that the workload demanded some kind of shortcuts). So the problem came back with a different, more vague set of keywords. They too were struck down but with the passage of time the IRS began backtracking on the questionnaires then threw up their hands and simply approved all of the applications. Well, two wrongs do not make a right.

A strict reading of the law (not the 1959 interpretation) says that to be tax exempt the organization must be exclusively engaged in social welfare activities -- in other words no political activity whatsoever, not even issue ads. It is time to enforce the law as it is written. That doesn't mean that these organizations engaging in political activity are illegal - only that they must apply as the Super-Pac's that they really are. The difference is not in the tax status - both are tax exempt - but reporting requirements. Large donors names must be listed. In the court of law you are allowed to me your accuser and the same should apply with political campaigns. Without transparency you have corruption -- it is that simple. And none of that would have happened by applying the law as written and that says "exclusively" for social welfare purposes. If anyone manipulated the IRS it is President Eisenhower with that 1959 ruling that gutted the intent of the law.