The tax law requires 501 organizations to operate exclusively to promote the "public welfare." In 1959 the IRS edited their tax codes to only require that they mostly promote the public welfare.
This loophole has allowed political activists to assume that they can spend up to 49% of their budgets on political ads, while still maintaining tax-exempt status that allows them to keep their donors secret.
This massive loophole was never authorized by Congress!
The current version of the Revenue Act of 1913 provides a tax exemption for:
Civil leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
26 U.S.C. § 501(c)(4)(A)(emphasis added)Then in 1959 the IRS redefined the term "promotion of social welfare" to depart radically from the statute:
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From the first time he turned a wrench on a car in his native France more than 60 years ago, Marcel... This frame grab courtesy KFOR TV shows the aftermath of a massive tornado as much as a mile wide with winds up to 200 mph roared through the Oklahoma City suburbs Monday, May 20, 2013.