New tax rules out of the Internal Revenue Service may change the way that political activity is treated for organizations that claim tax-exempt status. In the wake of the IRS scandal that allegedly targeted conservative groups because of their viewpoints in recent years, tax agencies are working to refine tax laws to prevent misunderstanding and increase fairness in the future. A new set of rules could change the way that tax-exempt groups present their political leanings, largely by encouraging them to focus on social welfare issues instead of providing direct support of candidates.
In many instances, such groups were coming under fire because they were directly supporting specific political candidates for office. Instead, those organizations may now be required to advertise their opposition to certain legislation, instead of urging Texas voters to choose a certain candidate who supports that type of legislation.
IRS leaders say that the new term, candidate-related political activity, will help define and restrict activities that are deemed inappropriate for social welfare non-profits. This type of political activity would include communicating with specific political party members under certain conditions. Further, organizations could be held responsible through the tax code for any campaign-related donations, no matter their nature. Organizations would also be limited from hosting political candidates at events that occur within 30 or 60 days of different types of elections.
Although these rules have not yet been propagated, IRS officials say they are optimistic about the regulations’ future. They say that the proposed regulations would help define tax status more clearly for political organizations, ensuring that tax-exempt groups are provided with the financial status they need to continue their social welfare endeavors. Opponents say that the new rules effectively make tax agencies First Amendment police by limiting the types of donations and statements that can be made by tax-exempt organizations. The effects of these rules are likely to remain poorly understood until they are actually implemented.
www.ketknbc.com, “IRS proposes new rules for tax-exempt organizations” No author given, Nov. 27, 2013