With the 2016 election looming, Republicans in Congress want to make sure the Internal Revenue Service won’t crack down on tax-exempt “social welfare” groups that serve as conduits for untraceable political spending. And the commissioner of the IRS indicated that,
With the 2016 election looming, Republicans in Congress want to make sure the Internal Revenue Service won’t crack down on tax-exempt “social welfare” groups that serve as conduits for untraceable political spending. And the commissioner of the IRS indicated that, in any event, the agency won’t adopt new regulations of these organizations in time for the rules to be applied to next year’s election.
Without new rules, potentially hundreds of millions of dollars will be spent on election-related activities with no accountability because, unlike “super PACs,” these so-called social welfare groups are not required to disclose their donors. …
When Congress approved tax-exempt status for these groups, it provided that they would be engaged “exclusively” in social welfare activities. An IRS publication defining such groups offers as examples associations build housing for the poor or provide financial planning. But in administering the law, the agency has redefined “exclusively” to mean “primarily,” allowing these groups to spend huge sums on election-related activity so long as a bare majority of their spending goes for other purposes.
Unfortunately, more restrictive regulations have been a casualty of the continuing controversy about the IRS’ treatment of tea party and other conservative groups seeking tax-exempt status. A Treasury Department inspector-general concluded the agency subjected those groups to scrutiny based on “inappropriate criteria.” …
Despite the backlash, the IRS — appropriately — moved to develop new regulations for social welfare groups. But preliminary rules proposed a definition of “election-related activities” so broad it included nonpartisan voters’ guides and candidate debates sponsored by nonpartisan groups. Now, regulations are delayed, and Republicans in Congress proposed legislation to impose a one-year moratorium on rule-making.
That would be good news for donors who want to influence elections anonymously, but it would be a disaster for democracy. … If Congress attempts to legislate a moratorium on new rules, Obama should reach for his veto pen.
— Los Angeles Times
