Newt Gingrich, a 527 and a 501(c)(3)... which doesn't fit?

Newt Gingrich's 527, American Solutions, reportedly returned a $50,000 contribution from a 501(c)(3) charity last week. What's remarkable about this is that Newt and his folks were the ones that likely saved the bacon of the folks at the foundation.

As most of you probably know, a 501(c)(3) public charity is prohibited by tax law from giving money to any entity in a manner which supports or opposes candidates for office. A 527, typically, exists solely for political purposes... usually supporting or opposing candidates. There are a few circumstances where a 501(c)(3) could give funds to a 527, but they're few and far between... and susceptible to great IRS scrutiny. It seems the Gingrich folks were pretty sure they couldn't spin $50,000 of anything they did as nonpartisan... so they returned the money to the (c)(3) to save them from themselves (or a sure-to-come complaint). In response, the Hasan Family Foundation, the 501(c)(3), stated:

American Solutions is a nonpartisan effort that is focused upon educating Americans... None of the funds contributed to the organization are going towards politicians or a political party. We would never contribute foundation funds to a political party and/or candidate.

The reality is that tax law is a lot stricter than that... Hasan Family Foundation can do nothing at all that supports or opposes candidates. Giving money to an obviously partisan 527 that will use that money to fund things that support or oppose candidacies (cough-cough... Newt Gingrich's presidential run?) crosses the line. Thankfully for the folks at Hasan Family Foundation, Newt's folks at American Solutions are a little more savvy on the ins and outs of tax law than they are.