By Donita Naylor
WASHINGTON, D.C. -- U.S. Sen. Jack Reed said "The IRS was wrong" in singling out tea party-affiliated organizations when they applied for tax-exempt status under section 501(c)(4) of the federal tax code, which waives taxes for social and welfare groups and allows them -- unlike other charities -- to participate in political activities if their "primary" activity is social welfare.
Reed's statement continued:
"This kind of allegation demands a serious investigation, and there must be one. The appropriate way to clarify whether any group is following the laws governing nonprofits is greater transparency when it comes to political activity."