Republicans Tell IRS to Scrap Rule Limiting Election Spending – Businessweek

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Republicans Tell IRS to Scrap Rule Limiting Election Spending – Businessweekby wpjljron.Republicans Tell IRS to Scrap Rule Limiting Election Spending – BusinessweekA proposed rule that may limit groups’ spending on elections “is an affront to free speech” and should be scrapped, congressional Republicans wrote in a letter to Internal Revenue Service Commissioner John Koskinen. The rule, which hasn’t been finalized, could limit spending from outside groups officially classified as non-profit social welfare organizations. The groups spent […]

A proposed rule that may limit
groups’ spending on elections “is an affront to free speech”
and should be scrapped, congressional Republicans wrote in a
letter to Internal Revenue Service Commissioner John Koskinen.

The rule, which hasn’t been finalized, could limit spending
from outside groups officially classified as non-profit social
welfare organizations.

The groups spent more than $310 million over the two-year
2012 election cycle, according to the Center for Responsive
Politics that tracks campaign finance. Some $265 million of that
— about 85 percent — was from organizations that align with
Republicans, according to the watchdog group.

“It is our view that finalizing this proposed rule would
make intimidation and harassment of the administration’s
political opponents the official policy of the IRS,” said the
letter released today. It was signed by House Speaker John Boehner, Senate Minority Leader Mitch McConnell and the top
Republicans on committees with jurisdiction over the IRS.

The proposal, released in November by the Treasury
Department, would create a new definition of political activity
for groups organized under section 501(c)(4) of the tax code.

The groups, which don’t have to disclose donors, must be
organized “exclusively” for social welfare purposes, according
to U.S. tax law. IRS rules have defined that as requiring that
such groups don’t have politics as their primary purpose.

Social Welfare

Republican-leaning groups, including large organizations
such as Crossroads Grassroots Policy Strategies and smaller Tea
Party-backed groups, have increasingly used the social welfare
status to engage in politics.

Starting in 2010, the IRS selected some Tea Party groups’
applications for 501(c)(4) status for extra scrutiny, and the
disclosure of that action in 2013 led to leadership changes at
the agency and congressional investigations.

“The eyes of America are on you,” McConnell said on the
Senate floor. “They’re counting on you to do the right thing.”

The proposed rule would define political activity broadly,
including voter registration drives and voter guides. The
proposal has drawn more than 22,000 comments so far, mostly
opposing the change.

The proposed rule doesn’t say how much political
involvement would be enough to disqualify groups from obtaining
and keeping social welfare status, and that’s an issue the IRS
would have to resolve before it implemented the change.

The IRS has asked for public comment on whether the same
definition should apply to labor unions and business groups.
Many Democrats say the IRS should adopt a strict definition that
follows the word “exclusively” in the tax code.

When asked yesterday, Koskinen gave no indication that he
would stop the rule. Comments are due by Feb. 27 and he said the
IRS would hold a public hearing after that.

Officials have said the rule wouldn’t take effect in time
for this year’s elections.

To contact the reporters on this story:
Derek Wallbank in Washington at
[email protected];
Richard Rubin in Washington at
[email protected]

To contact the editor responsible for this story:
Jodi Schneider at
[email protected]

Source Article from http://www.businessweek.com/news/2014-02-06/republicans-tell-irs-to-scrap-rule-limiting-election-spending

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