Ways and Means Votes to Block IRS Political Activity Rules

Committee Republicans approved a bill that limits the agency’s ability to redefine the permitted political activities of 501(c)(4) groups.

The House Ways and Means Committee this week approved a bill to block the Internal Revenue Service (IRS) from implementing new rules governing political activity by 501(c)(4) social welfare groups.

The bill (H.R. 3865), sponsored by Ways and Means Committee Chairman Dave Camp (R-MI), advanced on a party-line vote with Ways and Means Republicans saying they have not yet completed their investigation into allegations that the IRS targeted conservative groups applying for 501(c)(4) tax-exempt status.

The proposed IRS rule is overly broad and would codify the IRS’s ability to attack certain groups, opening the door to further encroachment on Americans’ First Amendment rights.

Camp said Tuesday that the proposed rules, issued by the Treasury Department and IRS last November, are “a blatant attempt to legalize and institutionalize targeting by the IRS.” Camp’s bill would halt the IRS rules process for a year while the committee completes its investigation.

The proposed rules would redefine “candidate-related political activity” by 501(c)(4) groups to include activities such as candidate forums or meet-and-greets, get-out-the-vote efforts, and voter education.

The IRS has asked for comments on whether the new rules should be applied to 501(c)(5) labor groups and 501(c)(6) trade and professional associations. The proposed rules have already generated a record number of public comments—more than 23,000 so far—with thousands more likely to be filed before the February 27 deadline.

ASAE is finalizing its own comments, which focus on the expanded definition of political activity and the suggested extension of the rules to trade and professional associations.

IRS Commissioner John Koskinen testified at a February 5 House Ways and Means Oversight Subcommittee hearing that the IRS will carefully consider all public feedback on the proposed rules so that the standards for 501(c)(4) tax exemption are clear and can be applied consistently.

“I believe it is extremely important to make this area of regulation as clear as possible, not only because it will help guide the IRS in proper enforcement, but will also give a better roadmap to applicants and help those that already have section 501(c)(4) status understand the applicable standards and properly administer their organizations,” Koskinen told the subcommittee.

Ways and Means Democrats opposed Camp’s bill during the committee markup, saying that Republicans continue to accuse the Obama administration of targeting its political enemies despite a lack of evidence. Rep. Sander Levin (D-MI), the ranking Democrat on Ways and Means, said he has his own questions about the proposed rules but that additional guidance is needed to clarify determinations on whether a 501(c)(4) group’s primary activities are political.

The rules “are anything but final—and I and many of my colleagues on this committee have our own questions about aspects of them,” Levin said. “But the proposed regulations are an important start to bringing both clarity to what now are wholly confusing rules governing 501(c)(4) and much-needed disclosure by organizations spending heavily to influence elections.”

A companion bill to H.R. 3865 was introduced in the Senate on Tuesday by Sens. Jeff Flake (R-AZ) and Pat Roberts (R-KS). The bill was needed to “keep the Obama administration from further targeting nonprofits—conservative or otherwise,” Flake said.

“The proposed IRS rule is overly broad and would codify the IRS’s ability to attack certain groups, opening the door to further encroachment on Americans’ First Amendment rights,” Roberts said. “It is clear the IRS has no capacity to regulate political activity without running roughshod over people’s fundamental constitutional rights.”


Chris Vest, CAE

By Chris Vest, CAE

Chris Vest, CAE is vice president, corporate communications and public relations at ASAE. MORE

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