Planned Parenthood Action Fund Ad Does Not Violate Tax Laws As Fox Suggested


Fox News attacked Planned Parenthood for violating tax laws by putting out an ad that criticized Mitt Romney. In fact, the ad was put out by Planned Parenthood Action Fund, which is organized under Section 501(c)(4) of the tax code, the same section Karl Rove's American Crossroads GPS uses to attack President Obama.

Fox News Falsely Accused Planned Parenthood Of Violating Tax Laws With Ad

Fox's Dobbs Attacked Planned Parenthood Action Fund Ad By Suggesting It Did Something Illegal By Putting Out Ad. During the May 30 edition of Fox Business' Lou Dobbs Tonight, host Lou Dobbs said he didn't know where Planned Parenthood "get[s] the right" to produce the ad. Catholic League president Bill Donohue suggested that if the National Right to Life organization attempted the same thing they would be told to "shut up or you're going to get your tax exempt status pulled." From the show:

DOBBS: Planned Parenthood, your reaction to -- this is, after all, a nonprofit. It is stepping directly into a presidential political race.


DOBBS: I don't understand where they get the right, Bill, to be involved in a political campaign as an active participant supporting one candidate. That seems crazy.

DONOHUE: Well isn't it amazing when the Catholic Church opens up we're told to "shut up" unless it's some issue that liberals seem to want us to talk about -- Planned Parenthood, your right, can do about it.


DONOHUE: If this were the National Right to Life people they would be told to "get in your place and shut up or you're going to get your tax exempt status pulled." Planned Parenthood does it and they say "well, you know, they're on the right side." That's all that matters. [Fox News, Lou Dobbs Tonight, 5/30/12]

Dobbs Later Said Planned Parenthood Action Fund Ad "Goes To The Issue Of" 501(c)(3) Organizations "Insinuating Themselves Into Our Social Life." From the May 30 edition of Fox Business' Lou Dobbs Tonight:

DOBBS: This is interesting, because it goes to the issue of 501(3)(c)s [sic] [unintelligible] -- non-profits. They are insinuating themselves into our social life, they're pervasive, 3 million of them in the country. They're really carrying out a function of the government. If we want this to be carried out as a matter of policy, it is one that should be affected by our elected representatives, it should be a matter of government should it not?

JUDITH MILLER (Fox News contributor): It should be.

DOBBS: It shouldn't be supplanted by a political unit that is what it is now, Planned Parenthood. [Fox News, Lou Dobbs Tonight, 5/30/12]

Fox's Bolling Claimed Planned Parenthood Is "Willing To Spend Our Money ... Attacking Mitt Romney On His Stance On Abortion." During the May 30 edition of Fox News' The Five, co-host Eric Bolling suggested that Planned Parenthood is using government funds to create its ad. Co-host Bob Beckel quickly corrected Bolling, explaining that the ad was created by "the political action arm" of Planned Parenthood "and they can do that as well as Karl Rove's committee can do it or anybody else's committee":

BOLLING: I don't know how in the world you can say taxpayer money didn't go to abortions when a big part of what Planned Parenthood does is abortions, and --

BECKEL: No, three percent, Eric, three percent

BOLLING: Bob, three percent based on what? The amount of time it takes to abort a child? Based on what?

BECKEL: Three percent of the money that Planned Parenthood has --

BOLLING: Here are the numbers. Here are the facts: Planned Parenthood gets somewhere near $500 million of taxpayer support.


BOLLING: They offer -- now we find out they're willing to maybe even break the law in some states -- there are four states that say it's illegal to offer abortions based on gender, there's 46 that say "no" -- now maybe they're breaking the law. And now they are willing to spend our money, $1.4 million of our money attacking Mitt Romney on his stance on abortion. I mean, none of this is floating in my book.

BECKEL: First of all, I'm going to try to attack you with a smile today and tell you that that is the political action arm of that committee and they can do that as well as Karl Rove's committee can do it or anybody else's committee. [Fox News, The Five, 5/30/12]

However, Planned Parenthood Action Fund Created The Ad ...

Planned Parenthood Action Fund Ad Says It Was "Paid For By Planned Parenthood Action Fund." The Planned Parenthood Action Fund ad on the Planned Parenthood Action Fund Facebook page states: "Planned Parenthood Action Fund is responsible for the content of this advertising." Screenshot from the website:

[Planned Parenthood Action Fund via Facebook, accessed 5/30/12]

Planned Parenthood Action Fund Is Organized Under Section 501(c)(4) Of The Federal Tax Code. According to a summary of Planned Parenthood's financial activities, the IRS classifies Planned Parenthood Action Fund as a 501(c)(4) not-for-profit organization:

Planned Parenthood Federation of America, Inc., is a tax-exempt corporation under Internal Revenue Service code section 501(c)(3) and is not a private foundation (Tax ID #13-1644147). Contributions are tax-deductible.

The IRS classifies the Planned Parenthood Action Fund as a 501(c)(4) not-for-profit organization. Contributions are not tax-deductible. [Planned Parenthood, 2007-2008 reports, accessed 5/31/12]

... And It Is Legal For Planned Parenthood Action Fund To Engage In Politics

According To The IRS, Organizations Filed Under Section 501(c)(4) Of Tax Code "May Intervene In Political Campaigns." According to part 7 of the IRS's Internal Revenue Manual, Rulings and Agreements, filed under chapter 25, section 4.7 titled "Intervention in Political Campaigns":

The promotion of social welfare does not include participation in political campaigns on behalf of or in opposition to any political candidate. Reg. 1.501(c)(4)-1(a)(2)(ii). An exempt IRC 501(c)(4) organization may intervene in political campaigns as long as its primary activity is the promotion of social welfare. IRC 501(c)(4) organizations are subject to the tax imposed by IRC 527 on any expenditure for a political activity that comes within the meaning of IRC 527(e)(2). See Rev. Rul. 81-95, 1981-1 C.B. 332. [Internal Revenue Service, 2/8/1999]

Indeed, Karl Rove's American Crossroads GPS Attacks Obama Under The Same Tax Status

Politico Reported That Rove's Crossroads Grassroots Policy Strategies Registered Under Section 501(c)(4) Of U.S. Tax Code. From a October, 2010 article by Politico:

[L]ess than one month after the panel, with American Crossroads entering its fourth month of existence struggling to raise money from donors leery of having their names disclosed, the Crossroads operatives spun off a sister group called Crossroads Grassroots Policy Strategies (or Crossroads GPS, for short), which they registered under a different section of the tax code - section 501(c)4 - that does not require donor disclosure. [Politico, 10/25/10]

Crossroads GPS' Latest Ad Is An Attack On Obama's Record. [Crossroads GPS, 5/22/12]

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