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The Hill: House Dems push IRS on tax-exempt rules

February 14, 2014
In The News

The Hill

Dozens of House Democrats are urging the IRS to get the tax-exempt groups at the center of the agency’s targeting controversy out of politics altogether.

Rep. Peter Welch (D-Vt.) and other Democratic lawmakers insist that it’s wrong to allow 501(c)(4) groups – which spent hundreds of millions of dollars in the 2012 campaign – to take part in the political process at all.

Democrats have for years called out the difference between the law and the regulations governing those groups, and have suggested a lack of clarity there contributed to the extra scrutiny the IRS gave to Tea Party groups.

The law says 501(c)(4) groups should exclusively work on promoting social welfare, while regulations say that should be their primary purpose.

The House Democrats, in their new letter to the IRS, follow up on a message they sent last June – just weeks after the targeting controversy broke.

In that letter, the Democrats asked that 501(c)(4)s be allowed at most an "insubstantial amount of work outside its social welfare mission." Many groups currently interpret the rules to mean that a majority of their work must be on social welfare issues.

"The new regulation should completely prohibit any 501(c)(4) organization from making expenditures supporting or opposing a candidate for public office," the Democrats added in June.

The Treasury Department and the IRS released new proposed rules in November that said that any activity for or against a candidate couldn't be counted toward a 501(c)(4)s social welfare mission.

Those rules have so far received well over 20,000 public comments, with two weeks left on the comment period. The proposed regulations don't specify how much social welfare work a group must do to qualify for the tax exemption, instead asking for comments on that issue.

Congressional Republicans are pushing to get those rules delayed, saying they would merely institutionalize the targeting the IRS acknowledged last year. (The rules would be in place for groups across the ideological spectrum.)

The House is expected to vote on a bill from House Ways and Means Committee Chairman Dave Camp (R-Mich.) in the coming weeks that would delay the rules for a year.