Say, for example, that 30 days before the 2016 New Hampshire primary President Obama makes a Supreme Court nomination. In addition, a statement by a leader, officer, or volunteer speaking on behalf of a 501(c)(4) organization that references or depicts any public official within 30 days of a primary or 60 days of a general election is candidate-related political activity if published in the news media. But again, if the group is a labor union or a local chamber of commerce, there is no such problem. All of the costs of the event and the value of the volunteer time is counted as candidate-related political activity for purposes of determining whether such activity is 50 percent or more of what it does (in which case, the group loses its tax exempt status). Similarly, a candidate forum or debate sponsored by a citizens group is candidate-related political activity even if all candidates are invited. But this is not the case if the group is a labor union or a local chamber of commerce. Thus, the IRS would include as “candidate-related political activity”:įor example, if a citizens group sets up a table where volunteers register voters during a county fair, this activity must be counted as candidate-related political activity even if there is no candidate literature and no campaign activity. In order to strike at these groups - most of which are conservative - the Obama IRS proposes to redefine “candidate-related political activity” to encompass most of what 501(c)(4) organizations normally do. This is where the new proposed regulation comes into play. These groups have been able to meet this test because they are far more focused on citizen education and grassroots lobbying than on the election of particular candidates. Labor Unions, a major source of the left’s funding of political causes, are not encompassed by 501(c)(4).įor half a century or so, IRS regulations have held that a political advocacy group maintains its 501(c)(4) status as long as “candidate-related political activity” is less than 50 percent of what it does. Indeed, few would be advancing this obnoxious contention were it not for the fact that most 501(c)(4) organizations advance conservative causes. As Bradley Smith reminds us, in a democracy, it is offensive to contend that political participation does not promote social welfare. The National Rifle Organization - or on the “left” - e.g. This is true whether the group is said to be on the “right” - e.g.
They aren’t charitable organizations, but they exist to promote social welfare as they see it. Political advocacy groups are natural candidates for 501(c)(4) status. How would the proposed IRS regulation accomplish this? To answer this question, we need to provide some background.ĥ01(c)(4) status applies to “civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.” Donations to these groups aren’t tax deductible - unlike with 501(c)(3) charitable organizations - but the groups are exempt from paying income taxes on donations they receive from members.
IRSS ARCHIVE FREE
The two events are best understood in tandem as a concerted effort by the Obama administration to limit severely the free speech rights of those who oppose their policies.
The program looked both backwards, to the IRS targeting scandal, and forwards, to the IRS’s proposed regulation regarding 501(c)(4) organizations. The others were Cleta Mitchell (whom Scott interviewed following the program), Bradley Smith, and Kim Strassel. Scott’s daughter, rising superstar Eliana Johnson, was one of the speakers. Last week, Scott and I attended the Heritage Foundation’s program on the Obama administration IRS’s assault on the First Amendment.