One of the most interesting results of the Citizens United decision is that the IRS may now be the primary arbiter of proper and improper campaign donations.
The Washington Post reports.
Basically, the IRS must now distinguish between 1) "genuine" tax-exempt campaign spending, whose purpose is to educate (and thus persuade) the electorate; 2) lobbying, which is not tax exempt; and 3) commercials, which are also clearly not tax-exempt. The issue is complicated because not just the nature of the communication is at issue; in some cases, organizations are hiding behind tax-exempt status to encourage donations to their organizations. Before CU, the FEC had some ability to limit such donations. Today, however, it is up to the IRS to determine whether the organization is a true "social welfare" or "educational" organization, or merely a front for corporate interests. Furthermore, the IRS has little or no authority to require disclosure of sources of financial support.
A bill that would require enhanced disclosure of both campaign expenditures and contributions failed in the Senate this summer.
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