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Democrats goal IRS to analyze tax-exempt pro-Trump teams that organized a rally within the Capitol previous to the Capitol riot

Supporters of US President Donald Trump fight with the police at the west entrance of the Capitol during a "Stop the Steal" protest outside the Capitol building in Washington, DC, on January 6, 2021.

Stephanie Keith | Reuters

Senate Democrats plan to focus on the Internal Revenue Service as part of a larger investigation into tax-exempt groups that helped organize the pro-Trump rally before the deadly January 6 riot at the U.S. Capitol.

Democrats, led in part by lawmakers on the Senate Finance Committee, have begun asking the IRS to review the tax-exempt status of the dark money groups that helped plan the rally. At the event, then-President Donald Trump encouraged his supporters to march on the Capitol.

The eventual uprising left five dead, including a police officer.

Several nonprofit groups helped plan and organize the rally, including Women for America First, a 501 (c) (4) organization chaired by a senior tea party attorney. It had previously been funded by America First Policies, a 501 (c) (4) organization chaired by former wrestling executive and former Trump cabinet member Linda McMahon.

Such groups are known as dark money organizations because they do not publicly disclose their donors.

Senator Ron Wyden, D-Ore., The senior member and expected chair of the committee, recently sent a letter to IRS Commissioner Charles Rettig asking him to investigate and investigate any group involved in planning the rally to see if she can revoke her tax exemption status.

"I urge the IRS, in coordination with other law enforcement agencies, to investigate the extent to which tax-exempt organizations were involved in any part of the uprising or actions of the Capitol in the lead-up to this event and, to the fullest extent of the law, the exemption status of those organizations that have a role have played in inciting or committing violence and other illegal acts, "said Wyden Rettig in the letter.

With control of the White House, House and Senate, Democrats may have the best opportunity yet to tighten regulations on these groups and the agencies that are supposed to oversee them.

Senator Sheldon Whitehouse, D-R.I., Another member of the Senate Finance Committee, goes a step further and examines how the IRS certifies these groups. Whitehouse has passed laws for years that would force dark money groups to divulge their donors.

In an interview with CNBC late Thursday, Whitehouse said he was particularly focused on the groups that organized the rally, during which Trump and some of his allies made inaccurate claims that the election was stolen in favor of current President Joe Biden.

"The most immediate (goal) is to investigate the dark money groups involved in the search of the Capitol," said Whitehouse.

Part of the focus, he said, will be on the IRS itself and how to deal with these groups.

"The question would be whether the IRS, beaten by the armed forces of the Right, interpreted and enforced the law, and whether its enforcement is actually compatible with the law," Whitehouse said.

The IRS has the power to revoke the tax exemption status of these groups if they exceed what the agency deems to be promoting "social welfare". Although it is a broad mandate, 501 (c) (4) are typically allowed to exercise limited political activity. You can focus on promoting specific guidelines that can be oriented towards candidates for federal office.

Democrats say these groups should lose the right to remain a 501 (c) (4) if they incite the insurrection.

Whitehouse told Treasury Secretary-designate Janet Yellen during her Senate confirmation hearing that he would ask her to "conduct a review of the IRS 501 (c) guidelines" once it is confirmed. "I believe that the IRS guidelines have long been very inaccurate with the legal instruction that Congress has given the IRS through these agencies," he added.

Yellen said she would initiate a review.

Beyond Whitehouse and Wyden, Democrats in general are making a legislative push against dark money organizations.

The summary of the Senate Democrats' first business mandates includes the DISCLOSE Act that Whitehouse introduced in 2019.

The bill, according to the Senate Democratic Legislature Summary, would require "super-PACs, 501 (c) 4 groups, and other organizations spending money on elections and judicial nominations to reveal donors contributing more than $ 10,000." ".

One of the Senate Democrats' priorities is a focus on the IRS.

The separate bill would remove an "existing ban on the IRS from enacting rules to provide clarity on the rules governing political activity under 501 (c)," the executive summary reads.

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