Conservatives Decry New IRS Plan to Restrict Groups

December 26, 2013
Sen. Michael Bennet (D-Colo.) led a group of Democratic senators urging IRS officials to apply extra scrutiny to non-profit organizations earlier this year

Sen. Michael Bennet (D-Colo.) led a group of Democratic senators urging IRS officials to apply extra scrutiny to non-profit organizations earlier this year

WASHINGTON – Looking at his calendar for this spring, Kevin McCarney wants his organization, Freedom Colorado, to hold two or three public forums for candidates to the U.S. House and Senate. He said no interested citizen “on God’s green earth” has the time to read every page of the bills candidates propose, so hearing from politicians first hand is invaluable.

McCarney started the process of applying for federal tax-exempt status for his Grand-Junction based organization, but his plans for a candidate forum would need to be curbed sharply under a new proposal from the U.S. Treasury Department and Internal Revenue Service. Social-welfare organizations could hold not any forum 30 days before the June 24 Republican and Democratic primaries, for example.

McCarney said if the proposal became law, it would hurt principled groups like his.

“I don’t think it’s political. I think it’s informational,” McCarney said of a candidate forum. “When we run a voter’s forum, we invite all candidates. We pride ourselves, even though we’re conservative, of having candidates from all parties attend.”

McCarney’s assurance of non-partisanship would need to be verified under the Treasury-and-IRS proposal, which has drawn the ire of some conservative activists as another heavy-handed attempt to prevent their organizations from being exempt from federal taxes.

The organizations are called 501(c)(4)’s for the section of the federal tax code that governs them. Under a 1959 federal law, they are prohibited from “direct or indirect participation or information in political campaigns on behalf of or in opposition to any candidate for public office.”

Yet the ban is general rather than absolute, a distinction that Obama administration officials are contemplating anew after the IRS scandal last spring.

In May, the Inspector General (IG) of the tax administration division of the Treasury Department concluded the IRS used “inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based on their names or policy positions instead of indications of potential political campaign intervention” from May 2010 to May 2012.

In a follow-up letter to a Democratic congressman, IG J. Russell George found the IRS flagged 70 percent of conservative groups that had the words “Tea Party,” “Patriots,” and “9/12 in their titles and 30 percent of liberal groups with words “Progress” and “Progressive.”

Sen. Michael Bennet (D-Colo.) too led a group of Democratic senators that urged IRS officials to apply extra scrutiny to these non-profit organizations.  On Feb. 16 and March 13, Bennet and six Democratic colleagues told then-IRS Commissioner Douglas Shulman to probe for possible abuses. Bennet aides noted the letters don’t mention any organizations or political parties by name.

The IG’s report concluded that IRS officials who review 501(c)(4) organizations in the future would struggle with two problems as their predecessors: How should they both define “political campaign intervention” and calculate the share of “social-welfare activities” that an organization participated in?

In a proposal published Nov. 29 in the Federal Register, IRS and Treasury officials came up with an answer. Not only-candidate forums but also voter-registration drives, voter guides, and communications that express a view for or against a clearly identified candidate or candidates of a political party would be prohibited.

Regina Thomson, the president of Colorado Tea Party Patriots, said if the proposal became law, it would stifle the activities of the Arapahoe-County group.

“If I bring in John Lott to discuss gun laws, is that political?” Thomson asked. “What the regulations say to the Tea Party is, ‘You can have your little meeting and talk among yourselves, but anything outside of that is considered political activity.”

Thomson said she would not comply with the proposal even if it became law. “I won’t comply. We’ll continue to do what we’re doing. I’m a stubborn person,” she said.

The 90-day comment period for the proposal ends Feb. 27, 2014.

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