[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) urged the Internal Revenue Service (IRS) to quickly investigate the tax status of Crossroads GPS and other organizations that are directing millions of dollars into political advertising without disclosing their funding sources. U.S. tax law requires that the primary purpose of 501(c)(4) organizations, like Crossroads GPS, cannot be political, including the “participation or intervention in political campaigns.”

“I write to urge the Internal Revenue Service to examine the purpose and primary activities of several 501 (c)(4) organizations that appear to be in violation of the law,” wrote Durbin. “[Crossroads GPS] has spent nearly $20 million on television advertising specific to Senate campaigns this year. If this political activity is indeed the primary activity of the organization, it raises serious questions about the organization's compliance with the Internal Revenue Code.”

Crossroads GPS was created in June 2010 as a non-profit “social welfare” organization under section 501(c)(4) of the federal tax code, which means, in addition to tax-exempt status, the group can raise and spend freely without being required to disclose to the public the sources of its funding. Crossroads GPS is affiliated with American Crossroads, a Section 527 group that can raise and spend freely on direct advocacy but must reveal its source of funding. Together these organizations have already spent a total of $20 million on political campaigns nationwide.

Text of the letter appears below:

October 11, 2010

The Honorable Douglas H. Shulman

Commissioner

Internal Revenue Service

1111 Constitution Avenue, N.W.

Washington, DC 20224

Dear Commissioner Shulman:

I write to urge the Internal Revenue Service to examine the purpose and primary activities of several 501 (c)(4) organizations that appear to be in violation of the law.

One organization whose activities appear to be inconsistent with its tax status is Crossroads GPS, organized as a (c)(4) entity in June. The group has spent nearly $20 million on television advertising specific to Senate campaigns this year. If this political activity is indeed the primary activity of the organization, it raises serious questions about the organization's compliance with the Internal Revenue Code.

In addition to its tax-exempt status, an entity organized as a 501(c)(4) is not required to disclose to the public the sources of its funding. Given the millions of dollars these groups are pouring into Senate campaigns across the country, it is imperative that the organizations spending such sums on political advertising are appropriately disclosing relevant information about contributors. The current spending patterns without disclosing the sources of the funding create a deeply troubling lack of transparency that threaten to undermine the ability of the electorate to make informed choices on Election Day.

I ask that the IRS quickly examine the tax status of Crossroads GPS and other (c)(4) organizations that are directing millions of dollars into political advertising, and respond with your findings as soon as possible.

Sincerely,

Richard J. Durbin

United States Senator