Proposed IRS tax-exempt guidance undermines free speech

Just before the Thanksgiving holiday, the Treasury Department and Internal Revenue Service (IRS) announced the issuance of proposed guidance for organizations seeking tax-exempt status. The guidance is a response to the tax agency’s targeting of conservative and Tea Party organizations, which began in 2010.

The Treasury and IRS proposed guidance defines “candidate-related political activity” and “would amend current regulations by indicating that the promotion of social welfare does not include this type of activity.” The agencies also will require groups engaging in candidate-related activity — including any communications that identify a candidate or party, voter registration and GOTV drives — to disclose contributions.

Via Lachlan Markey of the Free Beacon, some experts, rightly, allege that this is an attempt by the Obama Administration to side-step the 2010 Supreme Court’s Citizens United ruling and stifle free speech:

“This is an astonishing—and from this feckless, hyper-partisan administration, unsurprising—effort to curtail the free speech of Americans who come together to better their community,” said campaign finance attorney Dan Backer in an email.

The move was widely seen as a reaction to an ongoing scandal involving IRS treatment of applicants for 501(c)(4) status that were singled out for their perceived affiliations with the Tea Party movement.

However, experts say the guidance goes too far and amounts to an effort to roll back the Supreme Court’s 2010 decision in Citizens United v. FEC, which liberals have decried as allowing undisclosed donors too much influence over the political process.

Some noted that provisions restricting communications that mention a political candidate or party within 60 days of a general election and 30 days of a primary are similar to pre-Citizens United prohibitions on such communications.

“This is another transparent attempt by the administration to overturn that decision,” said Hans von Spakovsky, manager of the Election Law Reform initiative at the Heritage Foundation and a former Federal Election Commissioner.

The guidance, Von Spakovsky said in an email, “should be opposed by the entire nonprofit community regardless of whether they are on the left or the right side of ideological aisle.”

The proposed guidance is a pretty clear attempt to undermine super PACs, which have played a big role in the last couple of election cycles, basically implementing the core of the DISCLOSE Act by regulatory fiat. It ostensibly authorizes the targeting of groups that engage in any sort of political activity, leaving grassroots activists as losers in the process.

The rules aren’t likely to be in effect until well after the 2014 election, and the real-world impact remains to be seen. But Leftists are, of course, completely beside themselves with glee over the proposed guidance. They got what they wanted.

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