A hat tip to Virginia Galloway, who now works over at the Faith and Freedom Coalition, for a proposed rule change by the Internal Revenue Service that would affect 501(c)(4) organizations. The sticking point with a lot of the political entities that organize under that definition is this:
Under the proposed definition, any public communication that is made within 60 days before a general election or 30 days before a primary election and that clearly identifies a candidate for public office (or, in the case of a general election, refers to a political party represented in that election) would be considered candidate-related political activity. These timeframes are the same as those appearing in the Federal Election Campaign Act definition of electioneering communications. The definition of “election,” including what would be treated as a primary or a general election, is consistent with section 527(j) and the federal election campaign laws.
A communication is “public” if it is made using certain mass media (specifically, by broadcast, in a newspaper, or on the Internet), constitutes paid advertising, or reaches or is intended to reach at least 500 people (including mass mailings or telephone banks). The Treasury Department and the IRS intend that content previously posted by an organization on its Web site that clearly identifies a candidate and remains on the Web site during the specified pre-election period would be treated as candidate-related political activity.
The proposed regulations also provide that candidate-related political activity includes any communication the expenditures for which an organization reports to the Federal Election Commission under the Federal Election Campaign Act, including electioneering communications.
My understanding is that it would change the tax-exempt status of these organizations who sent out communications material about the election within 60 days of the election. So, things like voter guides, candidate scorecards, etc. that a lot of political organizations, both conservative and liberal, would fall into this new definition. The IRS is currently taking comments on the proposed rule change. The deadline for comments is this coming Thursday (2/27). You can take a look at the new regulation itself over at Regulations.gov. The Faith and Freedom Coalition has its own form to post a comment against the rule change over at DoNotSilenceUs.com.
Congressman Tom Price (R-GA-06) has an op-ed on the matter in the Washington Examiner (the full text below the fold):
What happens when one voices opposition to “big government?” Under President Obama, you may be targeted by the Internal Revenue Service.
They will audit you, show up at your place of employment and sic other executive agencies on your family or business.
Now, the Obama administration intends to unilaterally modify the tax code in further efforts to silence political speech.
In November, the IRS announced that it would completely transform the 501(c)(4) classification used by groups organized for the purposes of “social welfare.”
From veterans’ organizations to civic education programs, many important nonprofits fall under this designation.
Currently, contributions to these organizations are not tax deductible for their donors, but these groups are not required to pay taxes to the U.S. federal government.
These nonprofits are allowed to participate in the political process, within limits, and typical activities include voter education, advocacy and holding town halls. Many free market groups file under this classification.
The new rules would virtually halt such activities. Plus, the IRS would require 501 (c)(4) non-profits to pay taxes, knowing full well that these groups cannot afford to do so.
Their intent is to force groups into reclassifying under a different category of the tax code, as 527 non-profits. The 527 groups are not taxed on their donations, but they are required to disclose their donors to the Obama administration.
Conservative groups would be forced to choose: Change their classification to a 527 non-profit and open up their donors to abuse at the hands of Washington bureaucrats, or shut down all-together because they can’t afford the taxes levied against them if they remain a 501(c)(4) organization.
The Obama administration argues that the current rules governing 501(c)(4) groups are too complicated for them to administer properly.
Their complaint is pretty perplexing, considering the rules governing these non-profits aren’t new. In fact, they were established in 1959. Fifty-five years seem like plenty of time for the IRS to figure out how to regulate nonprofits.
Unsurprisingly, such changes to the IRS code won’t affect a key Democrat political beneficiary — labor unions.
These groups, while nearly identical to 501 (c)(4) non-profits, fall under the 501 (c)(5) classification. Their regulations would remain untouched in this IRS overhaul, so they would be free to continue politicking as they have in years past.
This is an obvious political move by the Obama administration, as labor unions contribute the vast majority of their political donations to Democrats.
What can be done to stop this? So far, tens of thousands of patriots have registered concerns by submitting public comments to the IRS. Freedom-loving Americans refuse to be silenced.
In the meantime, congressional Republicans are working legislatively to prevent the IRS from silencing political dissent through manipulation of the tax code by executive fiat.
This week, the U.S. House of Representatives is voting on a measure that would prohibit the IRS from implementing its proposed new regulations on tax-exempt groups for one year.
This will give Congress the ability to continue its investigation into the IRS targeting scandal and long-term oversight over the agency.
Sadly, this is just the latest in the never-ending saga of Obama’s executive overreach and use of the federal government to punish those with whom he disagrees.
Public engagement and the Republican resolve are critical to fighting it. Together, we can stop this government abuse.
Rep. Tom Price, M.D. represents Georgia’s sixth congressional district. He is vice chairman of the House Committee on the Budget, and a member of the House Committee on Ways and Means, which has jurisdiction over the IRS.