IRS Yanks Democratic Leadership Council Tax Status

Forbes reports:

Does the Democratic Leadership Council--the centrist policy factory whose founders in 1985 included an Arkansas governor who later wound up in the White House--benefit mainly Democrats or the whole country? Some left-wing Democrats might say it does neither.

Now, in a previously unreported action, the Internal Revenue Service has revoked the DLC's tax exemption on the grounds that it primarily benefited a private group--Democrats, and particularly "New Democrats" running for or holding office--rather than the community at large. The DLC has sued in federal court to overturn the decision; the outcome could affect the spreading use (abuse?) of tax-exempts by politicians and those seeking to influence them. Convicted lobbyist Jack Abramoff is just one character who has used money from tax-exempts to get the attention of legislators.

At the very least the DLC's tax woes will make an intriguing footnote in the annals of strange bedfellows. For example, the DLC's chairman during the years the IRS alleges it wasn't bipartisan enough was Senator Joseph Lieberman, now running as an independent after Connecticut's Democratic primary voters rejected him for being too pro-Bush. The Justice Department has hired a researcher from Public Citizen, the watchdog group founded by Ralph Nader, to help make the case against the DLC. And the DLC has enlisted an aide to former President George H. W. Bush to vouch for its commitment to ideas over party.

We expect the DailyKos crowd to be quite happy with the Bush adminstration on this one.No word yet on whether the DLC likes this kind of big activist government.