A story from msnbc begins; "501(c)(4) — it's the most potent little algorithm in politics right now." The article highlights VoteVets.org and other 501(c)(4) groups and their advertising methods. As discussed before, the role of 501(c)(4) organizations in elections will be talked about even more leading up to the 2008 election. VoteVets.org have been placing heavy pressure in districts where Republicans are up for re-election next year. As that time nears, it will be interesting to observe what is perceived as an increased reliance on 501(c)(4), welfare organizations as a campaign tool.

IRS guidelines suggest that as long as the group does not target voters in a candidate's state or district with ads shortly before an election, and as long as it has been running a series of "issue ads" outside of election season, then its tax status is safe.

The Hill reports that the Federal Election Commission (FEC) will most likely rake in more money from violators than in years past; "the FEC in 2007 will exceed last year's total of $6.2 million, which in turn was more than double any previous year's collection." All have noticed more enforcement at the FEC with bringing in larger settlements. This vigorous trend started with enforcing fines on 527s that played a major role in the 2004 election. Some say that these large fines have caused some 527s to change their tax status to a 501(c)(4), avoiding the FEC and disclosing of donors. And the FEC still refuses to set specific rules for 527s, taking each case as it comes.

"There has not been much consistency … on how these groups are being fined and why," said Paul Ryan, associate legal counsel for the Campaign Legal Center (CLC). "Going through the FEC papers, there is no bright line rule but rather a mosaic of varying facts and circumstances that triggers political committee status for these groups."

According to BNA Money and Politics ($$) the Exempt Organizations Division in the Internal Revenue Service (IRS) will issue precedential guidance on what constitutes political activity based on the IRS fact sheet published in February 2006, but will hopefully provide more precise information for tax exempt organizations going into the 2008 election season. The guidance on political activity for 501(c)(3) organizations was a part of the IRS's first update of its 2006-2007 priority guidance plan.

IRS has not yet cleared the books from its 2004 referrals--complaints from watchdog groups, individuals or others who allege improper campaign activity by tax-exempt organizations. "There were some difficult issues," [Judith Kindell, IRS tax law specialist] said. Moreover, IRS has not finished looking into referrals from the 2006 elections. The service is seeking to avoid falling behind again as it looks toward the 2008 election year. "We are still meeting fairly frequently and looking at the allegations this year, to make sure we are caught up with it," Kindell said.