The Internal Revenue Service is used to being universally disliked every April 15. But this year, the widespread denunciations have started early, and for good reason.
In November, the agency issued proposed new rules that are supposed to keep social welfare organizations from abusing their legal privileges by engaging in excessive electioneering. The effort came in response to complaints from Democrats about a 2012 surge in political spending by such tax-exempt groups, by the conservative Koch brothers and others to influence elections.
The IRS wants to curb such efforts, and it doesn’t display much concern about the likely effect on free speech. But groups that engage in political advocacy, including the nonpartisan kind, are genuinely alarmed.
The groups affected are called “social welfare” groups, and they have always been allowed to spread their views about public policy. To remain tax exempt, though, they are supposed to spend more than half their funds on social welfare activities, which do not include politics. The trick is distinguishing campaigning from other political activities. And it’s a trick the IRS clearly has yet to master.
The agency does not get, or deserve, the benefit of the doubt in this realm — if only because it got caught targeting certain conservative organizations. In considering requests for tax-exempt status, it singled out groups with the term “tea party” or “patriot” in their names for extra scrutiny.
An investigation by the Treasury Department’s inspector general found the IRS guilty of using “inappropriate criteria,” delaying action, and pelting organizations with “unnecessary, burdensome questions,” such as the names of present and past donors. The agency had to admit the practice was “absolutely inappropriate and not the way we should do things.”
But officials don’t seem to have learned the lesson about not discouraging free speech on political matters.
In the draft regulation, the IRS treats any message that mentions a candidate within 60 days of an election or 30 days before a primary as political activity. Ditto for any communication that could be construed as supporting or opposing a candidate, anytime. So if a group wanted to say, “Call Sen. Jones and tell her we need the F-35 fighter,” the ad would go down as political, even if Sen. Jones chairs the defense appropriations subcommittee and has announced she won’t run for re-election five years from now.
Not only that, but a lot of public service engagement would fall on the wrong side of the IRS line. Voter registration, sponsorship of debates, voter education projects — all would be discouraged.
Conservatives are naturally upset by what they perceive as an effort to silence them. Senate Republican leader Mitch McConnell said the rules “would essentially allow the IRS to bully and intimidate Americans who exercise their right of free speech.”
But the proposal has drawn strong criticism from plenty of liberal groups too. The Sierra Club said it “harms efforts that have nothing to do with politics, from our ability to communicate with our members about clean air and water to our efforts to educate the public about toxic pollution.”
The American Civil Liberties Union said it “could pose a chilling effect on issue advocacy” to the disproportionate detriment of “small, poor nonprofits that cannot afford the legal counsel to guarantee compliance.” Labor unions, which do not fall under the regulations, fear that someday they will be included.
The simplest way for nonprofits to stay out of trouble, of course, would be to simply shut up. So the likely — and unhealthy — consequence will be to reduce the amount of advocacy and educational information available to the public, not only about elections but about all sorts of policy issues.
That’s reason enough for the IRS to scrap the proposal and start over. In guaranteeing freedom of speech and freedom of the press, the First Amendment was meant to promote an informed, aware and engaged citizenry. This rule would do just the opposite.