WASHINGTON — A former congressional candidate is taking the Internal Revenue Service to court for its failure to enforce its laws governing political activity by nonprofits organized under the social welfare section of the tax code.
Dr. David Gill, the 2012 Democratic candidate in Illinois’ 13th district, and Citizens for Responsibility and Ethics in Washington (CREW) are suing the IRS for allowing the “dark money” nonprofit American Action Network to spend $2.6 million against Gill while enjoying tax exemption and donor anonymity.
Gill and CREW have alleged that the IRS improperly interpreted tax law when it promulgated regulations for social welfare nonprofits, stating that they must be “primarily” focused on social welfare. In contrast, the federal statute states that these nonprofits must be “exclusively” focused on social welfare.
This interpretation has been highly controversial ever since the 2010 Citizen United decision allowed corporations — including nonprofit corporations — and unions to spend freely on elections. Since then, social welfare nonprofits have become a huge force in federal elections, with spending exceeding $300 million in the 2012 campaign.
“It is offensive that the IRS turns a blind eye to reality and allows partisan political groups to seek refuge in a provision of the IRS code that is meant to govern organizations such as volunteer firefighter companies and homeowner organizations,” Dr. Gill said.
The IRS told HuffPost that they do not have a comment and typically don’t comment on pending litigation.
Dr. Gill said he believes that his razor-thin defeat on Nov. 6, 2012, was due to misinformation about his support for Medicare spread by American Action Network’s ads. One ad stated that Gill’s support for single-payer health care meant that he wanted to eliminate Medicare.
“As I went around the district, I was told that people who were going to vote for me changed their minds to save Medicare,” Gill said.
Gill lost by just 1,002 votes to Republican Rodney Davis. The Davis and Gill campaigns combined to spend $2.7 million on the entire election, just $100,000 more than the spending by American Action Network. The only group spending more than American Action Network on the race was the Democratic Congressional Campaign Committee (DCCC), which spent nearly $2.9 million on the race.