As Internal Revenue Service Commissioner John Koskinen sat before members of the House Ways and Means Committee this week, hot on the agenda was a proposed IRS rulemaking that would restrict the activities of certain tax-exempt groups in the same class as those that were victims in the IRS targeting controversy last year.
In his prepared remarks, Commissioner Koskinen, who took over leadership of the IRS in December, stated, “Another priority for our agency is to put to rest all of the issues and concerns surrounding applications for tax-exempt status. Taxpayers need to be confident that the IRS will treat them fairly, no matter what their background or their affiliations. Public trust is the IRS’ most important and valuable asset.” Regarding the political and social welfare activities of 501 (c)(4) organizations, he highlighted the importance of clarity both for IRS enforcement and the relevant organizations’ own administrative purposes. He also noted, “The proposed guidance also seeks comments regarding whether standards similar to those that have been proposed should be adopted to define the political activities that do not further the tax-exempt purposes of other tax-exempt organizations and to promote consistent definitions across the tax-exempt sector.”
However, House Ways and Means Committee Chairman Dave Camp (R-MI), highlighting the continuing investigation of last year’s IRS targeting scandal, declared: “I want to be perfectly clear – this Committee will fight any and all efforts to restrict the rights of groups to organize, speak-out and educate the public, just as unions are allowed to do so…. I believe the IRS has a long way to go in restoring its credibility. But, you can take a first step by complying with this Committee’s request and stopping all action against 501(c)(4) groups until the appropriate investigations are completed.” Chairman Camp last month introduced legislation to block this IRS rulemaking proceeding.
Senior Republican leaders in both the House and Senate, including House Speaker John Boehner (R-OH) and Senate Republican Leader Mitch McConnell (R-KY), co-authored a letter expressing similar alarm at the IRS rulemaking. Urging abandonment of the proceeding, they stated, “This proposed rule is an affront to free speech itself. It poses a serious and undeniable threat to the ability of ordinary Americans to freely participate in the democratic process.”
By Aaron Mercer, Vice President of Government Relations
Published: February 7, 2014