Probe of social welfare groups' tax status

ALBANY -- New York Attorney General Eric Schneiderman has expanded an investigation into tax-exempt social welfare groups to see whether they are crossing permissible boundaries from educating the public into influencing national politics, according to officials familiar with the inquiry.

The officials, who spoke on condition of anonymity because the probe has not been publicly announced, said the roughly two-dozen organizations are both pro-Republican and pro-Democrat, and the issue is whether they should qualify for tax-exempt status.

Under state law and regulations, any organization that gets $25,000 in annual donations from New York sources is required to register with the attorney general's Charities Bureau.

They were sent to groups ranging from the Alliance for Retired Americans Educational Fund in Washington, D.C., which says its role is "educating on public policy issues that affect retirees," to Americans for Limited Government in Fairfax, Va., which says it is "committed to advancing free-market reforms, private property rights and core American liberties."

Rick Manning, spokesman for Americans for Limited Government, said the group has responded to the attorney general's request and is confident that it doesn't meet the donations threshold under state law.

Calls to the Retired Americans Educational Fund were not immediately returned yesterday.

The officials said it was unclear with some organizations how much their educational role actually exists compared with their political role, and that Schneiderman didn't want to wait for the slower-moving IRS and Federal Election Commission to act.

They declined yesterday to name all the groups from which information was requested.

The IRS says provision 501(c)(4) of the tax code provides for exemption of civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare that are "primarily engaged in promoting in some way the common good and general welfare of the community."

In 2003 instructions, the agency said that is a "catchall" provision for "presumptively beneficial" nonprofits that don't fit into its other categories, also noting that "social welfare" is difficult to define precisely.