Calling it a war on free speech, Senate Republican Leader Mitch McConnell of Kentucky is urging the head of the Internal Revenue Service to resist rule changes regarding politically active groups that are tax-exempt.
The Obama administration is tightening the tax code for non-profits under section 501(c)4 to curb the influence of “social welfare” groups, which are often involved in political campaigns and activities.
The proposals were introduced last November by the Treasury Department in response to the IRS scandal, and they seek to define political activities explicitly in the tax code and determine which fall outside of the social welfare category.
Speaking on the Senate floor Thursday morning, McConnell, who is up for re-election this year, said the president is trying to stifle his critics in the 2014 mid-terms. And the GOP leader is asking IRS Commissioner John Koskinen to consider other options.
Democrats and government watchdog groups argue these regulations are necessary in the face of the Citizens United, claiming the surge of money into federal elections has allowed many of these political organizations to masquerade as community-oriented groups.
From the New York Times:
Under current rules, promoting social welfare can include some political activity, along with unlimited amounts of lobbying. Some of the largest political nonprofits — like Americans for Prosperity, backed by the conservative philanthropists Charles and David Koch — have used that provision to justify significant expenditures on political ads.
Fred Wertheimer, the president of Democracy 21, a watchdog group, praised the proposal as “an important step forward.” He added, “Enormous abuses have taken place under the current rules, which have allowed groups largely devoted to campaign activities to operate as nonprofit groups in order to keep secret the donors funding their campaign activities.”