Will a record-breaking amount of criticism force the Obama administration’s hand to soften proposed new rules for political nonprofits?
Opponents sure hope so.
Three months after the administration unveiled a controversial new rule for 501(c)(4) nonprofits, both liberal and conservatives groups are hoping a record amount of comments and a deluge of attention from Capitol Hill will persuade the Internal Revenue Service to at least pare back the proposals before finalizing the new rule.
“No one thinks the proposals are perfect. There is near unanimity among liberals and conservatives that the effort was a bit too broad,” said Stephen Spaulding, a staff counsel with the liberal advocacy group Common Cause, which is generally supportive of revamping campaign finance laws.
At issue is the vague tax law that currently governs these nonprofits, which count among their number Crossroads GPS, founded by former George W. Bush adviser Karl Rove, and the liberal-leaning Patriot Majority. As it stands now, the law on 501(c)(4)s says such groups need to “exclusively” focus on social welfare, while the IRS regulations say social welfare must be their “primary” focus.
The IRS and Treasury proposed a new standard, applying to groups regardless of political affiliation, classifying any communications within 60 days of a general election that clearly identifies a candidate or party or some get-out-the-vote efforts as political. It would replace a vague “facts and circumstances” test that currently applies.
Also considered political would be events within 30 days of a primary election or 60 days of a general election at which any candidate appears — even if the event is bipartisan.
The comment period for the draft proposal, which closed on Thursday, garnered nearly 145,000 comments from trade groups, 501(c)(4)s and other nonprofits, lawmakers and a number of former Federal Election Commission and IRS bigwigs.
The effort was the first major response to the IRS tea party targeting controversy, which led President Barack Obama to fire the acting IRS commissioner and cause other officials to exit, giving the IRS a major public-relations black eye.