News Column

IRS Rules Change Seen As Limiting Nonprofit Free Speech

February 1, 2014

By Seth McLaughlin, The Washington Times

IRS, nonprofit, taxes, free speech

Conservative groups are mounting a major resistance effort against the Internal Revenue Service's post-tea party targeting scandal rules, which are designed to clamp down on outside groups' ability to organize as nonprofits and still play a role in political conversations.

Senate Minority Leader Mitch McConnell fired a major shot Thursday, taking to the chamber floor to say the rules amount to a declaration of war on free speech and vowing the GOP will try to block them.

"Every American needs to know about this abuse of power," said Mr. McConnell, Kentucky Republican. "Let me be clear: What the administration is proposing poses a grave threat to the ability of ordinary Americans to freely participate in the Democratic process."

Tony Perkins, president of the Family Research Council, which has faced IRS audits, said the rules would give the Obama administration more power to muzzle its critics.

"We have seen that this administration cannot be trusted with the authority they have," he said. "Why give them more?"

But Stephen Spaulding, legal counsel at Common Cause, a nonprofit that advocates government transparency, said the rules apply to groups on both the right and left, and called the idea that they are anti-free speech "laughable." He said they stemmed from a "kind of paranoid vision that the president is after them."

"Sen. McConnell's remarks and a lot of those on the right and from the tea party are breathtakingly dishonest," Mr. Spaulding said. "Apparently, they want to give a free pass to folks that would like to abuse our tax laws and set up these social welfare organizations as tax shelters to hide political donors."

The changes, which the acting IRS commissioner rolled out during the Thanksgiving recess just before he was replaced, have largely flown under the radar while Congress has focused on investigating suspected abuses. In May, an audit from the Treasury inspector general for tax administration found the tax agency had been singling out for extra scrutiny tea party and conservative groups that applied for tax-exempt status.

The proposed rules would create a category of banned "candidate-related political activity" -- including registration drives, voter guides and issue advocacy.

Under the current IRS rules, groups that sign up under the 501(c)(4) section of the tax code as "social welfare" organizations can take part in some political messaging, but that cannot be their primary activity. They do not have to reveal their major donors.

The rules, however, are open to interpretation -- with many groups arguing that they can spend up to 49 percent of their money on politics without running afoul of the primary-purpose stricture.

The rules prompted the latest fight in a yearslong battle over interest groups and their roles in politics. Democrats have been calling for a crackdown since the Supreme Court's 2010 Citizens United decision allowed corporations and labor unions to spend money advocating for or against issues, leading to a flood of conservative and tea party groups signing up for nonprofit status.

Rep. Chris Van Hollen, Maryland Democrat, said the IRS is trying to bring more transparency to the political process so big donors can't siphon money to tax-exempt groups for political purposes.

"The issue is not whether or not outside groups can spend money to influence these elections," Mr. Van Hollen told The Washington Times. "The question is whether or not voters have a right to know who is spending gobs of money to bankroll these campaigns and try to influence the outcome of elections."

He added, "You just have to ask the question: Why is it they don't want the public to know who is spending all this money in our elections?"

Cleta Mitchell, a lawyer representing tea party groups fighting the changes, said the IRS has become a "rogue, lawless agency" and "the enforcement arm for the Democratic Party."

"We are in a death struggle over the First Amendment and the right of the citizens of this country to criticize their government," Mrs. Mitchell said. "There are some of us who are going to do everything we can do to stand in front of that IRS tank in Tiananmen Square. We are going to do everything we can to slow these down."

Mrs. Mitchell sent a letter to the Office of Management and Budget this week on behalf of tea party groups requesting that the IRS and Treasury Department look into whether the proposed rules comply with the Paperwork Reduction Act, Regulatory Flexibility Act and other related executive orders.

Mrs. Mitchell also requested all the internal and external documents that were used as a basis for writing the draft rules and is considering filing a lawsuit demanding that the comment period on the changes -- which is scheduled to end Feb. 27 -- is extended until she receives the information requested.

Mr. McConnell has tried to stop the proposed rules by stripping out funding in the 2014 spending bill. Democrats objected, however, and prevented him from attaching language to the bill.

House Ways and Means Committee Chairman Dave Camp, Michigan Republican, is pushing legislation that would postpone the rule changes for a year, and his committee has scheduled a hearing with IRS Commissioner John Koskinen next week to inquire about the rules and other IRS changes in the wake of the tea party scandal.

Jay Sekulow, chief counsel of the American Center for Law and Justice, which represents more than 40 groups suing the Obama administration over IRS targeting, says the draft regulations "appear to be an attempt to double down on the improper actions of the IRS with respect to the rights of conservative, grass-roots organizations to engage in free speech and free association."

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(c)2014 The Washington Times (Washington, DC)

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Distributed by MCT Information Services

Original headline: IRS rules change seen as limiting free speech for nonprofit organizations



Source: Washington Times (DC)


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