Watchdog's tax status, politics are questioned

The Hill News is reporting that activities undertaken by Citizens for Responsibility and Ethics in Washington (CREW) are being scrutinized by the IRS.

CREW’s activity could draw scrutiny from the IRS, which late last month issued new guidance on political activity by 501(c)3 tax-exempt groups. CREW is such a group, which means donations to it are tax-deductible.

After finding that nearly 60 tax-exempt organizations engaged in some level of prohibited political activity during the 2004 election cycle, the agency reaffirmed its policy that “all Section 501(c)3 organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition) to any candidate for elective political office.”

The agency has announced: “With the 2006 campaign season approaching, the IRS is launching enhanced education and enforcement efforts, based on the findings and analysis of the 2004 election cycle.”

The IRS did not release the names of the organizations it found had engaged in political activity.

Groups that violate the policy are subject to hefty financial penalties or revocation of their tax status, several tax experts said. Republican Party officials say they are weighing a tax complaint against CREW for engaging in partisan activity.

CREW has gained a name for itself by filing a number of complaints, reported at more than 20, against Republican Lawmakers. CREW's Chief, Melanie Sloan, is a former aide to Democratic lawmakers John Conyers (MI) and Chuck Schumer (NY). Other prominent Democratic operatives serve in key positions within the organization.

It is important to note that despite their seemingly naked partisanship in terms of outcomes, just because the GOP has been CREW's target does not necessarily make them a partisan organziation--but it surely doesn't look good.