The Internal Revenue Service has decided to award most nonprofit groups tax exemption status without being screened, Time reported Sunday.
IRS Commissioner John Koskinen told Time that about 80 percent of charitable groups seeking tax exemption will go through a simplified application process. Groups that report total assets lower than $250,000 and an income of less than $50,000 can pay a $400 fee and fill out a three-page form to automatically be eligible to receive tax-deductible donations.
Prior to the change, the application process involved a 26-page form, and required groups to provide supporting documentation and outline their intended activities to be considered for tax-exempt status.
The new process, which Koskinen said will result in “efficiencies [that] will translate into a faster and better review,” is expected to significantly reduce the screening process designed to prevent fraudulent activity on the part of political groups.
The announcement comes amid a congressional probe into the IRS' supposed targeted scrutiny of tea party and other conservative groups seeking 501(c)(4) tax-exempt status in 2013. The IRS' Exempt Organizations Division, the office at the center of the probe, will look at between 40,000 and 50,000 fewer applications from 501(c)(3) organizations under the new screening process, Koskinen told Time. While 501(c)(4)s can engage in unlimited lobbying, endorse or oppose candidates, and engage in political activity, 501(c)(3)s can do none of that.
Marcus Owens, director of the Exempt Organizations Division from 1990 to 2000, told Time it's likely political groups will funnel "dark money" into 501(c)(3)s similarly to the way they have to 501(c)(4)s; as candidates center their campaigns around certain issues, tax-exempt 501(c)(3)s can pour money into messaging those issues without directly tying their message to the candidate. Donations to 501(c)(3)s are tax-deductible, but donations to 501(c)(4)s are not.
“What we’ll see is the so-called dark political money that flowed into the (c)(4) world is going to begin to flow into the (c)(3) world,” Owens said.
"That’s what the (c)(4)s were doing, but that kind of activity could be just as easily in a (c)(3), but it would have the added advantage of having tax deductibility attached to it."
Read more at Time.