Social Welfare Organizations like VMFP are covered in Section 501(c)(4) of the Internal Revenue Code.

Section 501(c)(4) organizations are "social welfare" tax-exempt nonprofit organizations. They need not apply for recognition from the IRS, but they must file with the IRS annually. Substantial contributors are reported to the IRS, but those contributors are not made public.

The "primary purpose" of a Section 501(c)(4) organization must be the promotion of social welfare. Political intervention is not considered the promotion of social welfare, but lobbying activities are. Lobbying, therefore, may be the primary purpose of the organization. (51% of the time).

A Section 501(c)(4) organization may engage in political intervention, so long as that is not its "primary purpose." In practice, most organizations keep track of their expenses to ensure that a majority of their funds are not spent on political purposes. The definition of political intervention is very broad; the IRS considers all of the facts and circumstances when making that determination.

Political activities of a 501(c)(4) may also implicate Federal and State election law. In short, activities that support or oppose candidates should be engaged in only with caution.

Finally, a section 501(c)(4) organization must ensure that it is not created or operated for the "private benefit" of any person. The IRS has recently revoked the exemption of 501(c)(4) organizations who it believes "privately benefited a political party" by being too closely aligned with it. Thus, organizations should ensure that they are sufficiently independent of a political party.

The Internal Revenue Service website has a lengthy article on Social Welfare Organizations and their tax exempt status.

See the law on the Cornell University website: Section 501(c)(4) of the Internal Revenue Code