The Legal Quagmire of IRC § 501(c)(4) Organizations and the Consequential Rise of Dark Money in Elections

Section 501(c)(4) organizations have recently become a hot topic with respect to campaign finance. Following the 2010 Supreme Court case, Citizens United v. Federal Election Commission, the number of IRC § 501(c)(4) organizations ballooned in number, and the amount of money flowing through § 501(c)(4) groups increased 2390 percent from the 2008 election cycle to the 2012 election cycle. This essay explores the dangers to the campaign finance system of the substantial increase in spending by IRC § 501(c)(4) organizations. The foundational claim of this essay is that IRC § 501(c) is in need of a statutory and regulatory overhaul to limit the amount of influence dark money has on election outcomes. The crux of this essay’s proposed amendments to the Treasury regulations is to create clearer guidelines for tax-exempt groups to abide by and to force campaign finance money to flow through the proper channels and receive oversight from the proper regulatory agency