Watchdog Groups Call on IRS to Adopt New Rules
In a letter sent to the IRS, Democracy 21 and the Campaign Legal Center summarized comments they had submitted regarding the ongoing IRS rulemaking proceeding to consider new regulations to govern eligibility for section 501 (c)(4) tax status.
The letter stated:
On May 7, 2014, the American Bar Association Section on Taxation submitted comments to you and other officials of the IRS and Treasury Department regarding a proposed regulation set forth in the Notice of Proposed Rulemaking issued last November, “Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities” 78 Fed. Reg. 71535 (Nov. 29, 2013).
Given this submission, Democracy 21 and the Campaign Legal Center are writing to summarize the two sets of comments our organizations previously submitted to the IRS in the same rulemaking. In one set of comments submitted on February 27, 2014, Democracy 21 and the Campaign Legal Center, on behalf of ourselves and Representative Chris Van Hollen, addressed issues relating to the amount of campaign activity that social welfare groups are legally permitted to conduct under the Internal Revenue Code and under court interpretations of the Code. In a second set of comments submitted on the same day, we addressed the definition of “candidate-related political activity.”
The IRS is expected to issue a new notice of proposed rulemaking in early 2015 that will set forth a revised proposed rule. It is essential for the IRS to adopt a final rule in a timely manner in order to prevent further abuse of the tax laws in the 2016 election cycle by groups that claim to be social welfare organizations in order to hide the donors financing their campaign activities.