Government & Politics

Proposed IRS Rules Drawing Criticism From Unexpected Places

Even leftist groups realize that an IRS clampdown means trouble for political speech.

Feb. 26, 2014

For some time now, the IRS has been working to codify its abuse of power and political persecution of the Tea Party and other conservative groups. As we noted two weeks ago, the new rules were being ironed out at least by 2012 and probably sooner, though the proposed regulations weren’t published in the Federal Register until November 2013. In short, the IRS aims to newly categorize all kinds of nonprofit activities as political and thus subject to additional scrutiny, in essence restoring elements of campaign finance reform that the Supreme Court struck down in Citizens United v. Federal Election Commission in 2010.

So-called 501(c)(4)s – named for the tax code section under which they are created – are tax-exempt nonprofits that work to advance social welfare. Yet the IRS proposes to classify as political any group’s communication, public or private, if it expresses “a view on, whether for or against, the selection, nomination, election, or appointment of one or more clearly identified candidates or of candidates of a political party.” The IRS also seeks to prevent 501(c)(4)s from naming a candidate within 30 days of a primary election or 60 days of a general election, even in the pursuit of policy goals. This is particularly problematic when by the very nature of today’s government everything is political. The new rules would mean that so much of an organization’s activity would be classified as political that many would have to rework their entire mission or disband altogether.

Comments on the proposed rules are still open until Feb. 27. There are nearly 70,000 so far [Update 2/28: There were over 140,000 comments.] – an unusually high number for a regulation – and the vast majority are negative. In fact, many of the negative comments are from the Left. In a 26-page comment, the ACLU said the rules “will produce the same structural issues at the IRS that led to the use of inappropriate criteria in the selection of various charitable and social welfare groups for undue scrutiny.” Translation: Tea Party targeting would be codified. The Sierra Club, a rather extreme environmental activist group, complained that the IRS proposal “harms efforts that have nothing to do with politics, from our ability to communicate with our members about clean air and water to our efforts to educate the public about toxic pollution.”

The end game is to force 501(c)(4)s to register as political action groups, thereby also having to disclose their donors. Senate Democrats have taken to lobbying the IRS to make the change, in part because those Democrats find their own seats in jeopardy and they want to silence political opposition. But perhaps complaints from leftist interest groups will dissuade the Obama administration from going forward with the new rules. For once, we have something in common.

Finally, House Oversight Committee chairman Darrell Issa (R-CA) recalled now-“retired” IRS official Lois Lerner to testify at a March 5 hearing on IRS abuse. Lerner famously pleaded the Fifth in May 2013, but also made a statement insisting that she had done nothing wrong. The House Committee determined that she waived her Fifth Amendment rights by making that statement and should be compelled to testify.

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