Last Updated:November 26 @ 05:35 pm

Obama admin will openly use IRS to limit campaign activities of tax exempt groups

By Los Angeles Times

(File Photo)

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.

Although the rules would apply to liberal and conservative groups alike, the announcement drew attacks from conservatives and Republicans in Congress, who said the proposed rules would be an abuse of power.

"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.

The process of writing new rules to cover these influential groups touches on sensitive issues of free speech and the proper role of government in regulating political spending, adding to the complexity of the effort.

"This is protected 1st Amendment activity, and it seems to me, unless you have it strictly limited, it's unconstitutional," said Cleta Mitchell, an attorney who represents conservative groups before the IRS.

The 501(c)4 organizations are defined by the IRS code as promoting "the common good and general welfare." They are permitted to engage in some campaign-related activity, as long as politics is not their "primary purpose."

But the IRS has never spelled out exactly what that means.

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.

The proposed new rules 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.

The IRS has not proposed a new standard for how it would decide whether politics or social welfare is a group's primary purpose. The agency is soliciting comments on whether it should do that.

"This proposed guidance is a first critical step toward creating clear-cut definitions of political activity," Mark J. Mazur, Treasury assistant secretary for tax policy, said in a statement. "We are committed to getting this right before issuing final guidelines that may affect a broad group of organizations."

Some of the IRS proposals reflect Federal Election Commission rules. Any communications that "expressly advocate" for a candidate would count as politics, including all references to candidates of a political party.

Any communication that even mentions a candidate would also be considered political activity if it fell within 60 days of a general election, or 30 days of a primary. That rule, however, would leave groups free to spend money without restriction on ads during the summers of election years so long as they do not promote a candidate.

Unlike the FEC's rules, the IRS limits would also cover state and local races.

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.

By focusing on the activity, not the intent, the IRS is trying to get away from the "fact-intensive inquiries" it now uses to determine whether groups are neutral.

But Rep. Darrell Issa (R-Vista), who conducted hearings this year on the IRS scrutiny of conservative groups, objected that the proposal "will have a much more profound impact on grass-roots and community organizations than on the well-heeled groups it supposedly targets."

The new approach will raise almost as many questions as it answers, said Marcus Owens, a former director of the IRS' nonprofit division.

"What we have here is not clearly a step forward," he said. "It's a lawyer's relief bill."

The agency will invite comments for 90 days. There is no timetable for writing the final rules


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  1. Pingback: Obama admin to openly use IRS to limit campaign activities of tax exempt groups |

  2. MadeinAmerica33Comment by MadeinAmerica33
    November 27, 2013 @ 9:03 am

    I think all candidates should be allowed a FIXXED dollar amount for their campaigns. Use it, and if they run out to bad. This will force them to use it wisely, and maybe stop some of the current nonsense going on in campaigning.

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    Rating: 4.5/5 (26 votes cast)
  3. tejanoangelComment by tejanoangel
    November 27, 2013 @ 9:15 am

    How much do you want to bet that 90% of the groups that will be persecuted with this “new” policy will be conservative organizations? Oh, yes he throw a liberal group under the bus now and then, to make it look like he is being fair. And the case of the one liberal group targeted by this policy will be paraded by the media as a way to make Obama’s policy seem “non partisan.”

    So the abuse of power by this administration continues in the second term, and nobody seems to care.

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    • extyrequeenComment by extyrequeen
      November 27, 2013 @ 10:27 am

      what he is doing is criminall….its illegal to use the irs for
      this and I guarantee if this was bush doing this…

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  4. whodunitComment by whodunit
    November 27, 2013 @ 9:34 am

    Just when you thought Obama couldn’t possibly do any more to destroy this country . . . he comes up with yet another plan. And yes, since he doesn’t really give a rodent’s behind about campaign finance, having cheated his way into office himself, he’s clearly going after conservative groups with this one.

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  5. teufelhundeComment by teufelhunde
    November 27, 2013 @ 10:01 am

    Right….this coming from the same guy that received millions of untold funds from overseas donations and the FEC did nothing about it. When is someone with the position and intestinal fortitude going to charge and arrest the criminals within this organized crime ring???

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    • mredComment by mred
      November 27, 2013 @ 8:03 pm

      I hate to say this, but the answer is NEVER. Simply because they can and will get away with it again. No one is holding anyone’s feet to the fire and making them use the constitution the way it was meant to be used. The reason is, people don’t have any idea what is really in the constitution and Congress WILL NOT USE IT. They even came out and said they don’t bother to see if the laws they pass are constitutional or not and they don’t care if they are not, they will do it anyway.

      People, I don’t know how many times I have to say this, but if you don’t know the constitution then you don’t have any business voting. Most of what this government does is unconstitutional and people just don’t know it because they don’t read ANYTHING about this constitution or our form of government. It was taught in school when I went, but no longer and for a very good reason. THEY DON’T WANT YOU TO KNOW. If you did know, then most of what they did would be thrown out and that would take all their power away from them and they can’t have that………………

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  6. rightlane1111Comment by rightlane1111
    November 27, 2013 @ 10:48 am

    CALLING ALL REPUBLICANS…do you see what is happening here. Are you representing us? Patriotic Democrats…if there are any left…what say you?

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  7. Pingback: IRS moves to limit tax-exempt groups after targeting scandal – Fox News |

  8. johnnylingo62Comment by johnnylingo62
    November 27, 2013 @ 11:13 am

    This door needs to Swing Both Ways!
    For the 2012 Election, the Leftist Progressives spent freely with tax exempt Status and Conservatives were blocked from entering the field.
    If these are the “Rules” then the IRS needs to enforce them with a BLIND eye to party affiliation! So far this has NOT been the case and the White House has used the IRS as a critic stopper and not as a neutral enforcement agency.

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  9. ksr1Comment by ksr1
    November 27, 2013 @ 12:20 pm

    How about this idea…Stop it all period. For campaigns to support one person or the other, have a time frame of only 30 days before an election, make the TV/Radio stations and news print give equal exposure/access time e.g. 30 second spots to all candidates. You have no long run-up periods and EVERYONE is treated the same.

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    • teapartyproudComment by teapartyproud
      November 28, 2013 @ 7:40 am

      You’re on the right track. How about we abolish all tax exemptions and the IRS while we’re at it. Then we don’t have to worry about how tax exempt groups spend their money.

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    • ksr1Comment by ksr1
      November 28, 2013 @ 8:32 am

      @TPP, Oh Boy, Now that IS a novel thought! Need to stop all special interest actions and carve – outs. Go to a National Sales Tax and do away with IRS for the individual earned income so they can concentrate on the ” Big Boys ” in industry and commerce. A level playing field IS a fair playing field for ALL.

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  10. thomasjeffersonComment by thomasjefferson
    November 27, 2013 @ 2:47 pm

    What do you think would happen if they couldn’t spend more than they would earn from the term of office in order to run for office? Only the “power mad” spend a billion dollars on an office that earns less than 2 million. It’s all about power.

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  11. spiritof76patriotComment by spiritof76patriot
    November 27, 2013 @ 3:09 pm

    At the risk of allowing my cynicism and distrust of government instutions to show through, I see two possible scenarios.

    #1: Just like the ‘nuclear option’ dropped on Senate Republicans the other day, it’s possible the Democrats may someday come to rue imposition of this new rule, like for instance when “our side” gets back in and puts our people in charge of the IRS.

    #2: More likely however, this new ploy is all about increasing the power of incumbent government. Therefore, I doubt you’ll see much pushback from Republicans, token at best, against these newly proposed IRS rules. Afterall, to most of the ruling elite in D.C., it’s all about maintaining tenure. The more that both sides can keep upstarts from getting elected, the better off the old boys (and girls) already in the club will be.

    As such, I tend to disagree with those who’d impose finite and arbitrary limits on the free speech of “We The People”. I’d much rather allow both sides to say as much as possible rather than risk limiting either side from saying something important.

    Sure, more or less unlimited campaigning is messy and provides opportunity for some politicos to spend their way into office; it can also be boring and dulling to the senses. I contend this will happen in any case…no matter how many rules are put in place. By allowing unfettered comment and not arbitrarily limiting citizen participation from groups that many of us belong to and through which we can now make our voices heard, we maintain our ability to speak out as we are inclined and to the greatest extent to which we are able to do so.

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  12. RPComment by RP
    November 27, 2013 @ 5:47 pm

    This is definitely political. Why hasn’t Obozo been questioned about the millions of dollars from foreign donors? Why shouldn’t Obozo also be limited from money collected from unions? The monies collected from unions could help pay for their Obozocare, which is the initial intent of union dues. To help pay for their extra benefits.

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  13. Pingback: Gates of Vienna News Feed 11/27/2013 | Gates of Vienna

  14. joejacksonComment by joejackson
    November 28, 2013 @ 7:23 am

    after doing the secretly for years and ,finally getting caught, the slimy Obama administration now will blatantly change the rules to benefit the Progressive tax exempt groups while strangling the conservative tax exempt groups. Obama and his friends have sat in faculty lounges for years plotting tricks like this steal election after election while conservatives play by the rules. Voter I.D. laws, tax exempt laws, college students voting in several different locations all are voting scams designed to steal elections one district at a time as in Virginia recently. Does anyone think the sleazy Terry McAuliffe could win honestly?

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  15. nunvyabizComment by nunvyabiz
    November 30, 2013 @ 4:54 pm

    If the laws are not applied to everyone equally, it is an abuse of power.

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