501(c)4

It seems the IRS is proposing to crack down (and look here) a bit on all those social welfare non-profits that just seem to do a lot of political stuff:

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.

Despite the fact that the rules will apply to all groups, conservatives seem to be more upset at this:

“This smacks of the administration trying to shut down potential critics,” said Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, which, like the Senate Finance Committee, has jurisdiction over the IRS.

Note one difference between the NY and LA Times in one aspect–NY:

Nick Ryan, the founder of the American Future Fund, which spent at least $25 million on political advertising last year, said, “Unfortunately, it appears that the same bureaucrats that attempted to suppress the speech of conservative groups in recent years has now put together new rules that apply to (c)4 groups but do not apply to liberal groups like labor unions.”

LA:

The vague language set the stage for the agency’s overzealous scrutiny of tea party and progressive groups, which came to light this year. IRS agents sent some groups long lists of intrusive questions to determine whether their main purpose was politics.

Newspapers are supposed to be even-handed, but nowhere in the NY Times article do they note that the IRS also looked at progressive groups–score one for the LA Times.

There are some possible problems with the rules, such as:

The new definitions would expand the reach of IRS regulations into areas long considered acceptable for civic groups, including get-out-the-vote drives, publication of voter guides, voter registration efforts and candidate forums. Those would be considered political activity whether they’re done by advocacy groups or the nonpartisan League of Women Voters.

The League of Women Voters’ guides have been informative, so should not be considered the same as advocacy publications. The full proposal is here which might take a while to read.

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