Two National Republicans Tell Schneiderman to Back Off on SuperPACs
Last month, it was reported that State Attorney General Eric Schneiderman began an investigation into whether some New York-based non-profit groups – which function as SuperPACs — are violating federal tax law by engaging in too much political activity. [Read my prior post on this here.]
This week, the Chair of the House Ways & Means Committee and the Ranking Member of the Senate Finance Committee wrote Schneiderman and said that his effort to obtain tax information directly from these groups violates federal privacy laws.
The letter from Rep. Dave Camp (R-Mich.) and Senator Orrin Hatch (R-Utah) calls on Schneiderman to end his investigation into these groups, saying that he should instead direct all inquiries to the Internal Revenue Service (IRS).
The lawmakers wrote:
“Clearly, federal tax law carefully and extensively safeguards the confidentiality of taxpayer information. Failing to follow the guidelines set forth in the Code suggests an attempt to improperly compel disclosure of federally protected taxpayer information. We, therefore, request that your office cease its efforts to obtain tax returns and tax return information directly from these groups. Your office should direct your inquiries instead to the IRS, which will promptly and appropriately process the request pursuant to federal law and procedure.”
Under federal rules, 501(c)4 status is intended for groups that provide community benefit and education. However, the IRS and the Federal Election Commission have not taken any action to address the tax-exempt status of SuperPACs.
Senator Hatch has been consistent in his defense of politically-driven non-profits. Last month, he was one of ten U.S. Senators who called on the IRS to avoid making politically-driven changes to the tax treatment of 501(c)(4) organizations.