Excerpt taken from the article
The handwriting over disclosure of who is giving money to 501(c)(4)'s in the run-up to the 2012 presidential election has increased, as donors seeking anonymity try to bring a cone of silence down around their contributions.
Social welfare organizations that are tax exempt under Section 501(c)(4) of the tax code offer a vital benefit to donors that want anonymity: unlike PACs they do not have to disclose their donors to the public.
Always an issue around election time, the identity of those contributing to these groups that funnel funds into candidate-related activities is more pronounced than ever, with the Republican-led Crossroads GPS and Democratic-led Priorities USA, two of the best known super-PACs, pledging to raise millions for issue advocacy related to their respective candidates. They are expected to have a major impact on the 2012 election.
Since Crossroads GPS first paved the way for attracting anonymous donations in the 2010 midterm elections, eyes have been focused on these social welfare organizations as potential harbingers of secret money.
Happy as the 501(c)(4)s may be that the dollars are rolling in, the advocacy groups receiving them are left asking the question: if they don't know who have the money, how far do they have to go to find out?
"People ask pretty frequently how you deal with this," Ofer Lion, an attorney in the Los Angeles office of Hunton & Williams said. "Schedule B is the one piece of the Form 990 that is not made available to the public." If an organization receiving money does not know where the money came from and can't easily find out, it can put anonymous, "but how you get to that point is the real question," Lion said.
"The IRS doesn't say you literally have to conduct an investigation. What it says is, if you know, you have to report," Marc Owens
, a former IRS Exempt Organizations director and now partner with Caplin & Drysdale said.Click here to read the entire article on anonymous donations to 501(c)(4)'s