Author: Erika Lunder and L. Paige Whitaker, Legislative Attorneys
The campaign activities of tax-exempt 501(c)(4) social welfare organizations continue to receive considerable attention. These groups operate with less restriction after the Supreme Court’s decision in Citizens United v. FEC, which invalidated long-standing prohibitions in the Federal Election Campaign Act (FECA) on corporations and labor unions using their general treasury funds to make independent expenditures and electioneering communications. However, even after Citizens United, 501(c)(4) groups are still subject to regulation under FECA and the Internal Revenue Code (IRC). Under FECA, incorporated groups are prohibited from making political contributions and are still required to establish a political action committee (PAC) in order to do so. (In contrast to independent expenditures and electioneering communications, contributions are given to a candidate or political committee). Additionally, the claim is sometimes made that 501(c)(4) groups should be required to register as political committees under FECA. This is important because political committees must raise and spend funds subject to FECA contribution limits, source restrictions, and disclosure requirements.