November 27, 2013

TAX WHAT YOU DON'T WANT:

IRS proposes new curbs on campaigning by tax-exempt groups (Joseph Tanfani, November 26, 2013, LA Times)

 In a long-anticipated move to restrict the flood of secret money in campaigns, the IRS for the first time proposed rules to rein in the political activities of tax-exempt groups that have emerged as heavyweight players in American elections. [...]

The 501(c)4 organizations are defined by the IRS code as promoting "the common good and general welfare." They are permitted to engage in some campaign-related activity, as long as politics is not their "primary purpose."

But the IRS has never spelled out exactly what that means.

The vague language set the stage for the agency's overzealous scrutiny of tea party and progressive groups, which came to light this year. IRS agents sent some groups long lists of intrusive questions to determine whether their main purpose was politics.

The proposed new rules wouldn't ban political activity, but would attempt to draw a clearer line between activities that are political and those that promote the general welfare.

The IRS has not proposed a new standard for how it would decide whether politics or social welfare is a group's primary purpose. The agency is soliciting comments on whether it should do that.

"This proposed guidance is a first critical step toward creating clear-cut definitions of political activity," Mark J. Mazur, Treasury assistant secretary for tax policy, said in a statement. "We are committed to getting this right before issuing final guidelines that may affect a broad group of organizations."

Some of the IRS proposals reflect Federal Election Commission rules. Any communications that "expressly advocate" for a candidate would count as politics, including all references to candidates of a political party.

Any communication that even mentions a candidate would also be considered political activity if it fell within 60 days of a general election, or 30 days of a primary. That rule, however, would leave groups free to spend money without restriction on ads during the summers of election years so long as they do not promote a candidate.

Unlike the FEC's rules, the IRS limits would also cover state and local races.

The new definitions would expand the reach of IRS regulations into areas long considered acceptable for civic groups, including get-out-the-vote drives, publication of voter guides, voter registration efforts and candidate forums. Those would be considered political activity whether they're done by advocacy groups or the nonpartisan League of Women Voters.

By focusing on the activity, not the intent, the IRS is trying to get away from the "fact-intensive inquiries" it now uses to determine whether groups are neutral.

Of course, we have this all backwards.  The only speech that must be free, under the First Amendment, is political speech
Posted by at November 27, 2013 4:29 AM
  

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