This is a guest post from local attorney Stefan Passantino.
Last week, a bipartisan coalition of lawyers representing tax-exempt 501(c)(4) social welfare organizations joined the chorus of objections to the numerous infirmities in the proposed IRS regulations governing 501(c)(4) entities. A copy of those objections can be found here. As one who represents 501(c)(4) entities and has already registered my serious concerns with the IRS over its proposed rulemaking, I share the objections raised by so many others. In my opinion, the rules as proposed have a distinct “Ready, Fire, Aim” quality to them in that they do little to address ostensible concerns with the activities of these organizations but have the potential to do a great deal of harm to the basic freedoms of speech and association we almost take for granted in this country because of the way the proposed rules are drafted.
Want an example? The way the IRS has drafted it’s proposed rules, the IRS is reserving the right to BAN BOOKS. The proposed rules would prohibit a 501(c)(4) entity from distributing written materials prepared by “candidates” but then goes on to define “candidates” as anyone who “is proposed by another for . . . nomination . . . or appointment to any federal, state or local public office”. That could be anyone whose ideas are powerful enough to make others, anywhere in the country, say “You know, she outta run for office”.
Even activities that other tax-exempt groups (charities, unions, and trade associations) are allowed to engage in (like nonpartisan voter ID, voter registration, or issuance of nonpartisan voter guides) would be banned for 501(c)(4) organizations. It is because of examples like this that opposition to the proposed rulemaking is decidedly bipartisan; with groups like the ACLU joining in expressing serious concerns.
If you are interested in learning more about the nuts and bolts of the proposed rules, you can read McKenna Long & Aldridge LLP’s client alert here.