The campaign activities of 501(c)(4) groups continue to receive significant scrutiny. These groups are among the entities operating with less restriction due to the Supreme Court's ruling in Citizens United v. FEC . In that case, the Court invalidated the prohibitions in FECA on corporations using their general treasury funds to make independent expenditures and electioneering communications. While 501(c)(4) organizations are operating with less restriction under FECA after Citizens United , there still remain important restrictions and requirements on these groups to engage in campaign activity under both FECA and the IRC. That is, FECA prohibits corporations from using their treasury funds to make contributions to candidates and parties, requiring them to establish a Political Action Committee (PAC) in order to do so; the IRC sets forth certain requirements related to maintaining tax-exempt status; and FECA requires a group whose major purpose is to elect federal candidates to register as a political committee, which means that it must raise and spend campaign funds subject to FECA's contribution limits, source restrictions, and disclosure requirements. Additionally, 501(c)(4) groups are subject to IRC and FECA reporting requirements. Second, the IRS has ruled that a group which primarily benefits partisan interests could jeopardize its 501(c)(4) status. While no statute expressly addresses the ability of 501(c)(4) groups to engage in campaign activity, this limitation is implicit in the statutory requirement in Section 501(c)(4) that organizations be "operated exclusively for the promotion of social welfare." Applying the standard that campaign activity (along with any other non-exempt purpose activity) cannot be the organization's primary activity raises three basic questions: what does "primary" mean; what is considered campaign activity; and how are the organization's activities to be measured. A key source for the information is the Form 990, which groups must file annually with the IRS. Reporting Requirements

		Internal Revenue Code

Under the IRC, 501(c)(4) organizations must generally file an annual information return (Form 990) with the IRS. However, any identifying information of the contributors listed on Schedule B is not subject to public disclosure. Additionally, the organization is required to disclose its donors who contributed at least $1,000. If an organization establishes a separate bank account, consisting only of donations from U.S. citizens and legal resident aliens made directly to the account for electioneering communications, then it is required to disclose only those donors who contributed at least $1,000 to the account. A Federal Election Commission (FEC) regulation provides an exception to the donor disclosure requirement for electioneering communications. The regulation permits corporations—including incorporated 501(c) organizations—and labor unions making disbursements for electioneering communications to disclose only the identity of each person who made a donation of at least $1,000 specifically "for the purpose of furthering" an electioneering communication. This regulation has been the topic of ongoing litigation. Independent Expenditures

FECA requires Section 501(c) organizations making "independent expenditures" that aggregate more than $250 in a calendar year to disclose whether an independent expenditure supports or opposes a candidate, whether it was made independently of a campaign, and the identity of each person who contributed more than $200 to the organization specifically "for the purpose of furthering" an independent expenditure.
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.
Under the IRC, a Treasury regulation requires that 501(c)(4) organizations have the promotion of social welfare as their primary purpose. This means two things: (1) campaign activity (along with any other non-exempt purpose activity) cannot be the organization's primary activity and (2) a group that primarily benefits private partisan interests may jeopardize its 501(c)(4) status. Questions abound about these two restrictions and how they are applied (e.g., how is campaign activity measured?), and the IRS has been criticized for failing to issue guidance in this area.
501(c)(4) organizations are required to report information to the IRS and FEC. They are generally required to file an annual information return (Form 990) with the IRS. Information about campaign activity is reported on the form's Schedule C, which is subject to public disclosure. While large donors are reported on the form, no identifying information is required to be publicly disclosed. Additionally, groups making independent expenditures and electioneering communications must file reports with the FEC. Only those donors giving more than $200 specifically "for the purpose of furthering" an independent expenditure are disclosed. For electioneering communications, FECA requires the disclosure of donors who contributed at least $1,000; however, if the group establishes a separate bank account, consisting only of donations from U.S. citizens and legal resident aliens made directly to the account, then only those donors who contributed at least $1,000 to the account are disclosed. A Federal Election Commission (FEC) regulation provides an exception to the donor disclosure requirement for electioneering communications. The regulation permits corporations—including incorporated 501(c)(4) groups—and labor unions making disbursements for electioneering communications to disclose only the identity of each person who made a donation of at least $1,000 specifically "for the purpose of furthering" an electioneering communication. This regulation has been the topic of ongoing litigation, Center for Individual Freedom v. Van Hollen, which is currently pending in the U.S. District Court for the District of Columbia.