Thirty-nine U.S. senators have co-sponsored S. 2011, the Stop Political Targeting by the IRS Act, which would protect the free-speech rights of 501(c)(4) organizations by prohibiting for one year the finalization of a proposed Internal Revenue Service (IRS) regulation that would significantly limit the advocacy and educational activities of these groups.
The bill would also prevent additional targeting of 501(c)(4) organizations by restoring the IRS 501(c)(4) standards and definitions that were in place before the start of the agency’s targeting of conservative groups in 2010.
On November 29, 2013, the Internal Revenue Service (IRS) and the U.S. Department of the Treasury issued a Notice of Proposed Rulemaking (NPRM) that would create new rules for “candidate-related political activity” (CRPA), which would be excluded from being an activity that promotes social welfare for 501(c)(4) organizations. The rule would broadly define 501(c)(4) political activity to include voter registration, voter education, communications that mention a candidate or party, grants to 527s, and events in which a candidate participates, among other activities. Even non-partisan activities would be limited.
The regulations specifically single out 501(c)(4) organizations and do not apply to other nonprofit organizations such as charities, labor unions or trade associations.
The administration has already faced harsh criticism for earlier attempts by the IRS to target these same organizations. On May 14, 2013, the Treasury’s inspector general for tax administration released a report finding that the IRS had inappropriately targeted and applied excessive scrutiny to the applications of conservative groups applying for 501(c)(4) tax-exempt status. Several IRS employees, including the acting commissioner, resigned as a result of the scandal. Investigations by the House of Representatives, the Senate and the Department of Justice are ongoing.
This past week, Wisconsin Senator Ron Johnson urged the IRS to abandon a “cynical, unconstitutional attempt to limit free speech” by joining 140,000 Americans in submitting a comment to the IRS on a rule that he says “insults our founders and every American citizen.”
“The Internal Revenue Service (IRS) is today the most widely feared federal agency, and rightly so in light of last spring’s revelations about the politically motivated targeting of certain organizations. To all but the most partisan eye, the IRS was turned into a political weapon against the opponents of the current administration,” stated Johnson. “This is simply wrong. It is un-American.”
“The proposed rule furthers this weaponization of the agency. In order for the IRS to perform its mission of collecting what revenue is needed to fund the government’s constitutionally defined duties, it must be totally without partisanship. It must be completely separated from serving political goals. It must never be used by either party to target Americans in a way that limits their political participation,” concluded Johnson.