Top Republicans Revolt Against Proposed IRS Regulations

by Eliana Johnson

Top Republicans including Senate minority leader Mitch McConnell, House speaker John Boehner, and House majority leader Eric Cantor are calling on the newly installed Internal Revenue Service commissioner to withdraw a proposed rule regulating tax-exempt 501(c)(4) groups, charging that it would muzzle the groups’ right to free speech. The GOP leaders say that the IRS, which last May admitted to singling out conservative groups for improper scrutiny, is attempting once again to silence them, this time in the runup to the 2014 midterm elections. 

“It is our view that finalizing the proposed rule would make intimidation and harassment of the administration’s political opponents the official policy of the IRS and would allow the Obama administration to use your agency as a partisan tool,” they wrote Thursday in a letter to IRS commissioner John Koskinen.

Under current regulations, 501(c)(4) groups must promote “social welfare” and can’t “primarily” engage in political activity. IRS agents have used “over 50 percent” as the mark by which to measure whether a group is primarily engaging in political activity, and the new rules controversially classify activities such as voter-registration drives and the production of voter guides as political activity. Critics see that as an attempt to kneecap 501(c)(4) groups and point out that 501(c)(3) charitable organizations, which are not permitted to engage in political activity, would be able to register voters and produce voter guides, which are not classified as political activities under existing 501(c)(3) guidelines.

The House Ways and Means Committee, in a hearing on Wednesday, furnished an e-mail that turned up in its investigation of the IRS targeting scandal indicating that the Treasury Department and IRS officials, including former head of the exempt organizations Lois Lerner, were drafting the rule “off plan,” meaning that the potential changes were not published on the public schedule. They were in the works, Ways and Means investigators found, as far back as 2011. 

Ways and Means Committee chairman Dave Camp, who signed today’s letter, has already called on the agency to delay any action on the rule for one year, until all investigations of the scandal that tainted the IRS have been completed.