Republican strategist Karl Rove says that Crossroads GPS, which is a part the American Crossroads super PAC that he founded, is a legitimate tax-exempt organization because it promotes "social welfare" like the NAACP.
During a panel discussion on Fox News Sunday about the IRS scrutinizing tea party groups, host Chris Wallace asked why Rove's political action committee qualified as a tax-exempt status as a social welfare group.
"Didn't the IRS have a problem in the wake of the Citizens United Supreme Court ruling in getting a handle on the question of what groups did and didn't qualify under the tax code for 501(c)4 status?" Wallace wondered.
"Look, 501(c)4s have been around for a long time," Rove explained. "And the Democrats and the left have used these for years, these social welfare groups to do some politics and a lot of social welfare. NAACP voter fund, for example, ran a $10 million advertising blitz in 2000 against George W. Bush. The League of Conservation Voters, the Sierra Club, Planned Parenthood, National Abortion Rights Action League and so forth. All of them are 501(c)4s, and there are pretty clear rules about what you can and cannot do. You have to spend a majority of you money on social welfare and a minority of your money on political activity."
"So what happened is the Democrats had this for decades -- literally decades -- and no criticism at all, and then Republicans began in 2010 to say if it's good enough for them, we'll duplicate that structure as well. And then suddenly we get what we get, which is a huge bunch of activity aimed at conservative groups that are filing as 501(c)4s."
"The only advantage of a 501(c)4 is it allows you to take your contributions and not pay taxes on them," Rove insisted. "That's the one advantage that this allows you to do."
"And also the donors aren't revealed," Wallace pointed out.
"Well, because again, it's a social welfare organization," Rove agreed. "This literally goes back to the 1940s when criminal penalties were added for the revelation by the IRS of donors because southern attorneys general were attempting to get the donors to the NAACP."
After criticizing President George W. Bush's administration, the NAACP was hit with an audit in 2004 over accusations of improper political activity. At the time, the IRS insisted that the audit had been initiated by the Kentucky office and was not done for political reasons.