(The Politico) The Democratic Congressional Campaign Committee is filing a complaint with the IRS today challenging the conservative group Freedom's Watch status as a non-profit. The DCCC the group has violated its non-profit status by running attack ads in a Louisiana special election targeting Democratic candidate Don Cazayoux.

"The DCCC is asking the IRS to hold Freedom's Watch accountable for its illegal election ads that are being used to mislead voters in LA-06," said Brian Wolff, the DCCC's executive director. "Freedom's Watch is trying to avoid paying taxes by claiming to be tax exempt, while running campaign ads that benefit a Republican candidate and the NRCC. Freedom's Watch illegal activity is quickly adding to Tom Cole and the NRCC's many problems."

In a letter to the IRS, Wolff asked the agency to reclassify Freedom's Watch, which includes several former officials from the National Republican Congressional Committee, as a 527 organization and to as penalize the group for improperly claiming non-profit status. 501(c)4s and other non-profits do not have to publicly have to publicly disclose their donors, while 527s must report them to the IRS, which becomes public information.

"As a result, Freedom's Watch is not described under section 501(c)(4) of the Internal Revenue Code, but under section 527, as an organization 'organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for . . . the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office,'"Wolff told the IRS.

"Freedom's Watch has deliberately chosen to organize under section 501(c)(4) instead of section 527 so that it may hide its donors from public scrutiny. By operating as a section 527 organization, however, it has willfully and flagrantly violated the registration and reporting requirements required of political organizations. Thus, it should be subject to the statutory penalty, which is thirty-five percent of each contribution not disclosed, and thirty-five percent of each expenditure not disclosed."

Copyright 2008 POLITICO

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