08.11.2011requiring public disclosure of donors financing this political spending. Now this battle moves to another level, as advocacy groups challenge the IRS standard for recognizing tax exempt status for organizations engaged in political activities. Democracy 21 and the Campaign Legal Center have filed a petition with the IRS challenging IRS regulations that define whether an organization that conducts campaign activity is entitled to obtain or maintain tax-exempt status. Currently, to be tax-exempt as a social welfare organization under Internal Revenue Code Section 501(c)(4), an organization must not engage in political activity as its “primary” purpose. The IRS has not defined “primary” for purposes of determining whether a 501(c)(4) is engaging in a permissible level of political activity. Rather, under the current “facts and circumstances” analysis, a 501(c)(4) organization generally seeks to demonstrate that less than 50 percent of its expenditures are political in nature. Such efforts have apparently led to some non-political spending sprees where an organization may potentially be able to devote 49 percent of its time to political activity while still maintaining its 501(c)(4) status as a social welfare organization. The petition proposes a “bright-line” test to limit political spending to no more than 5 to 10 percent of total activity as a condition for maintaining tax exempt status. Clearly, such a standard would take a big bite out of a 501(c)(4) organization’s potential political bark. Given the recent fracas occasioned by IRS steps toward gift tax enforcement, it does not appear likely that the IRS will be moving quickly to change the status quo.