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How Do You Define “Minor?”

By CREW Staff

When American Action Network applied for tax-exempt status back in February, it told the Internal Revenue Service that its goal was to "promote principles that encourage economic growth, an entrepreneurial spirit, security, prosperity, and freedom."

Of course, the application noted, "a minor portion of its activities may be classified as political campaign intervention."

We guess that depends on how you define minor.

"The American Action Network, led by Norm Coleman, the former Republican senator from Minnesota, went on the air Wednesday and is investing $15 million to $16 million in television and Internet advertising. Mr. Coleman said he expected to have spots up in 22 races across the country," The New York Times reported Oct. 13.

$15 to $16 million sounds pretty major to us.

According to the American Action Network's application for tax-exempt status, a public document CREW obtained from the IRS, the group planned to pursue its mission via activities such as policy advocacy, citizen forums, town hall meetings, college tours and training programs. The group's projected budget for the 2010-2011 year, as submitted to the IRS? Slightly more than $1.7 million in revenue and $1.68 million in expenses, with most of that money allocated to salaries.

That means the group is spending roughly ten times the amount it told the IRS it would - and that doesn't include salaries and other expenses, just the "minor portion of its activities" that includes campaign advertising.

The IRS granted the group 501(c)4 tax status in April, classifying it as a social welfare organization. That means the group doesn't have to pay income taxes and doesn't have to disclose the donors paying the bill for the millions of dollars in campaign ads. But such groups aren't supposed to be primarily engaged in campaign activity.

The group uses its web site to note that it "is not a "Republican," political, or electoral organization," but so far, its ads have exclusively supported Republican candidates, according to this Washington Post analysis.

We're not sure how the multimillion-dollar partisan campaign push squares with the way the group downplayed its plans to engage in campaign activity in its IRS application. American Action Network "may also run advertisements in support of candidates who support its key priorities," the application said, adding that the group will make sure "such candidate-related activity remains a minor activity, and does not become its primary activity. Although the amount of such activities may vary from year to year, on average, the Network expects that such activities will be 20% or less of its activities."

Maybe it's time for the IRS to take another look at this one?

Supporting Documents [PDFs]:

American Action Network's Application for Recognition of Exemption

Letter from IRS Granting American Action Network tax-exempt status

American Action Network - additional application documents