IRS Chief Hints at Broader Application for New Political Activity Rule

In an update on the proposed rule on political activity by nonprofits, IRS Commissioner John Koskinen told Congress and reporters that the agency may look to widen the rule’s lens to cover more than just 501(c)(4) organizations.

Last summer, the Internal Revenue Service announced that it was pumping the brakes on its proposed rule regarding how much political activity is appropriate for 501(c)(4) tax-exempt social-welfare organizations after it received more than 150,000 comments. Aside from an appearance at a House Oversight and Government Reform subcommittee hearing in September, IRS Commissioner John Koskinen has remained quiet about his agency’s work to revise the rule.

If it’s going to be a fair system, it needs to apply across the board.

That is, until last week, when he spoke to Politico about the progress being made. In short, Koskinen hinted that the rewrite may involve broadening the rule to include more than social-welfare organizations.

“If it’s going to be a fair system, it needs to apply across the board,” he said. “[I]f we have a set of definitions for 501(c)(4)s, what about everybody else? Can they do more or less [political activity]? And for us as [an] administration, for ease of administration, it makes sense to have this common definition.”

Specifically, Politico asked about section 527 organizations, which focus almost exclusively on elections and are already subject to Federal Election Commission rules on political activity and disclosure requirements. But, during his testimony last week at a hearing in front of the House Committee on Appropriations, Koskinen said all tax-exempt groups should have a clear road map forward.

“We’re looking at, to be fair, applications across the entire spectrum,” he said. “It shouldn’t just be (c)(4)s. We need to make sure that as Congress has legislated in all of these areas, there’s a consistent and appropriate framework for (c)(3), (c)(4), (c)(5), (c)(6), [and] 527s.”

In a statement to Associations Now, Jim Clarke, CAE, ASAE’s senior vice president of public policy, said while he’s interested in whether the rule will be expanded as wide as Koskinen suggested, he’s more concerned about how the IRS ultimately will define political activity.

“We firmly believe that associations have the right to petition the government and speak out on a wide range of political issues,” Clarke said. “We would be opposed to any expansion of the definition to include activities such as candidate forums or meet-and-greets, voter registration activities, or issue-based legislative alerts sent within 60 days of an election that urge support for or opposition to legislation sponsored by a member who is running for reelection.”

The IRS initially said the new rule would be ready by early 2015, but that deadline has come and gone. Now, the agency said, even if the rule is reissued before 2016, it will not apply to anyone until after the election in order to avoid another perceived targeting scandal.

(via the House Oversight and Government Reform subcommittee's Facebook page)

Rob Stott

By Rob Stott

Rob Stott is a contributing editor for Associations Now. MORE

Got an article tip for us? Contact us and let us know!