Tea party scandal update: IRS delaying rules on political groups

The IRS announced Thursday it is revising its plan for tax-exempt, big-money political outfits like Karl Rove's Crossroads GPS and the pro-Obama Priorities USA.

By Andrew Taylor, Associated Press / May 22, 2014

The Internal Revenue Service signaled Thursday that there will be further delays in new rules intended to rein in the use of tax-exempt groups for political campaigning.

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The agency announced it won't hold a hearing this summer until it has a revised plan to police loosely regulated big-money political outfits like GOP political guru Karl Rove's Crossroads GPS and the pro-Obama Priorities USA.

Thursday's announcement was read by both supporters and opponents of the regulations that a major rewrite was in the works. The outlines of an IRS plan for new rules on such groups were announced in November and sparked 150,000 comments, many from angry conservatives and tea party groups who said they were harassed by the IRS after seeking tax exempt status. The IRS says it's committed to carefully reviewing those comments before issuing new rules.

The IRS and the Treasury Department had said they wanted to prohibit groups from using 'candidate-related political activity' like running ads, registering voters or distributing campaign literature as activities that qualify them to be tax-exempt 'social welfare' organizations.

Under current rules, social welfare organizations may conduct some political work as long as it's not their main activity. The proposed new rules would block such things as running ads that 'expressly advocate for a clearly identified political candidate or candidates of a political party' as fulfilling their tax-exempt mission. And ads that simply mention a politician to, for instance, urge him or her to vote a certain way couldn't be run 60 days before a general election of 30 days before a primary.

The rules also would limit voter drives and voter registration efforts and distribution of literature.

Rep. Darrell Issa (R) of California said Thursday's announcement meant that the IRS 'has at least temporarily heeded the serious concerns expressed by myself and countless others, and has decided to scrap its proposed rule change restricting the political speech of social welfare groups.'

Supporters of the proposed rules said Thursday's announcement was a setback.

'This delay is deeply disappointing and a real setback for democracy and faith in government,' said Sen. Chuck Schumer (D) of New York. 'The only hope we have is when the IRS goes back, they don't succumb to any form of political pressure and enact a very tough rule that will equally curtail liberal and conservative groups.'

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