ARE ROVE’S GROUP, CHAMBER, AND OTHER CONSERVATIVE FRONT GROUPS SHIELDING WEALTHY DONORS FROM TENS OF MILLIONS IN TAXES AS WELL AS PUBLIC SCRUTINY?

Six political groups asked to inform secret donors of tax liabilities by watchdog

Washington, D.C—The nonpartisan campaign finance watchdog Campaign Money Watch sent letters to six conservative organizations questioning whether they have notified their secret major donors about their tax responsibilities. The six organizations have pledged to spend, collectively, nearly $250 million before Election Day, with much of that money coming in anonymously.

All six letters can be found online at www.campaignmoneywatch.com/GiftTax

“We know these organizations are shielding the identities of donors in their unprecedented effort to elect a Congress to advance a corporate special interest agenda,” said David Donnelly, director of Campaign Money Watch. “What we don’t know is if they are informing their donors of the tax liabilities associated with giving to organizations that engage in political activities financed by secret donations.

“All Americans should pay the taxes they rightfully owe, and have a right to lobby the federal government to try to change those tax laws they don’t like,” continued Donnelly. “But, as the law stands today, wealthy campaign donors have no right to stay in the shadows while avoiding paying the taxes the law requires them to pay. And if these organizations shield them, they should be held accountable.”

News reports estimate that the spending by these six organizations will approach $250 million or more this election cycle. The six organizations, all registered 501(c)(4) or 501(c)(6) under the tax code, have repeatedly denied calls to reveal their donors. Donations to these groups by individuals in excess of $13,000 are subject to a 35 percent gift tax. There are no taxes on donations to 527 committees, but those donations must be publicly disclosed. Last week, a spokesperson for Crossroads GPS, one of the groups receiving the letter, acknowledged they weren’t even aware that the “gift tax” existed.

The letter, which was sent to the American Future Fund, Americans for Prosperity, Americans for Job Security, American Action Network, Crossroads GPS and the U.S. Chamber of Commerce, calls on the organizations to share their procedures for informing donors:

Given the size of your electoral campaigns and the secrecy with which you have funded it, we believe it would serve the public interest for your organization to disclose whether you advise donors to pay or not pay the gift tax. Donors to 501(c)(4)s and 501(c)(6)s should not be allowed to avoid paying taxes, and we hope that your organization has a clear policy to notify donors of their significant tax obligation.

Campaign Money Watch estimates that the tax liability for this spending is as much as $43 million.

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Campaign Money Watch works to hold politicians who are against comprehensive campaign finance reform accountable for where they get their political donations. Learn more at www.campaignmoneywatch.com.