The Obama administration’s proposed crackdown on tea party and other nonprofit groups that want to play a role in politics is quietly crumbling as opposition builds across the political spectrum to new IRS rules.
Almost all of the nearly 70,000 public comments submitted as of Monday night were vehemently opposed to the proposal, which would limit the ability of social welfare nonprofits — those organized under 501(c)(4) of the tax code — to even talk about candidates in the two months before an election.
Conservatives have been battling the Internal Revenue Service, with the Republican-controlled House planning votes this week to try to halt the rules. But opposition from the other side of the political spectrum also is growing as liberal groups take a deeper look at the rules and realize they would affect more than just tea party and high-dollar conservative organizations.
The American Civil Liberties Union said the proposed rule “threatens to discourage or sterilize an enormous amount of political discourse in America.”
The Alliance for Justice, a coalition of more than 100 progressive groups, was opposed from the start. It led a signature drive on a letter asking the IRS to withdraw the series of changes, which it called “a very deep and troubling line in the sand.”
The League of Conservation Voters, one of the highest-spending nonprofits in the past election cycle, said it appreciates the IRS motives but worries that the agency is going too far.
The rules would set clearer limits for nonprofits that have played a greater role in recent elections.
|The proposed new rules by the Internal Revenue Service wouldn’t ban political activity, but would attempt to draw a clearer line between activities that are political and those that promote the general welfare. (Susan Walsh, AP / November 26, 2013)
|WASHINGTON — In a long-anticipated move to restrict the flood of secret money in campaigns, the IRS for the first time proposed rules to rein in the political activities of tax-exempt groups that have emerged as heavyweight players in American elections.
Tuesday’s proposal, which faces a long and likely arduous path before becoming final, could dramatically reshape the campaign landscape.
Since the Supreme Court’s Citizens United decision in 2010, nonprofit groups organized under section 501(c)4 of the tax code have poured hundreds of millions of dollars into television commercials to back candidates and political causes — without revealing their donors.
The groups include conservative organizations, such as Americans for Prosperity backed by billionaire brothers Charles and David Koch, as well as liberal ones, such as Organizing for Action, which started out as President Obama‘s campaign operation.
Nonprofit groups and trade organizations reported spending $309 million in the 2012 election, according to the Center for Responsive Politics, but much of their spending remains in the dark.
Such groups also have funneled millions into California elections, prompting an investigation and fines this year for some conservative groups that had concealed the sources of their money in ways that violated state rules.
As the influence of these groups has grown, advocates of campaign finance reform, along with many Democrats in Congress, have pushed the Internal Revenue Service to limit their activities.
“Unfortunately, groups on both ends of the political spectrum have tried to take advantage of the ambiguity in the law,” said Senate Finance Committee Chairman Max Baucus (D-Mont.).
Paul Ryan, senior counsel of the Campaign Legal Center, which advocates for tougher campaign finance rules, called the IRS proposal “a good sign coming from an agency that has done little or nothing” to regulate spending by nonprofits in politics.