IRS

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time to work through the reg­u­la­tory process and care­fully con­sider all pub­lic feed­back as we strive to en­sure that the stan­dards for tax-ex­emp­tion are clear and can be ap­plied con­sis­tently.”

Un­der the rules pro­posed Tues­day, groups would be con­sid­ered to en­gage in pol­i­tick­ing if they con­trib­ute to can­di­dates or par­ties or ad­vo­cate for their elec­tion or de­feat. But so would dis­tribut­ing voter guides or even host­ing a politi­cian at an event, if it’s within 60 days of a gen­eral elec­tion.

Congress’ chief tax writer, House Ways and Means Com­mit­tee Chair­man Dave Camp, said the IRS was act­ing too quickly, par­tic­u­larly since there are sev­eral on­go­ing con­gres­sional in­ves­ti­ga­tions into how the agency treated the tea party.

“Be­fore rush­ing for­ward with new rules, es­pe­cially ones that ap­pear to make it harder to en­gage in pub­lic de­bate, I would hope Trea­sury would let all the facts come out first,” the Michi­gan Repub­li­can said. “This smacks of the ad­min­is­tra­tion try­ing to shut down po­ten­tial crit­ics.”

And groups that were tar­geted by the IRS said the new rules ap­pear to be an ef­fort to blame poor word­ing in the law and the tea party groups them­selves, rather than to blame the of­fi­cials who over­saw the tar­get­ing.

House Over­sight and Govern­ment Re­form Com­mit­tee Chair­man Dar­rell E. Issa, who is also in­ves­ti­gat­ing the IRS, said the new rules will only hurt small grass-roots or­ga­ni­za­tions, not the ma­jor la­bor unions or well-funded busi­ness groups that of­ten back the Obama ad­min­is­tra­tion’s agenda.

“This is a crass po­lit­i­cal ef­fort by the ad­min­is­tra­tion to get what po­lit­i­cal ad­van­tage they can, when they can,” the Cal­i­for­nia Repub­li­can said.

The IRS ran into trou­ble when it de­cided to sin­gle out ap­pli­ca­tions from tea party groups for spe­cial scru­tiny. The agency sent many of those groups in­tru­sive ques­tions ask­ing about books they were read­ing, guests they were host­ing, names of group of­fi­cers and, in some in­stances, about their links with other groups.

Au­di­tors said those ques­tions were out of bounds, and also said the agency was hold­ing up many of the ap­pli­ca­tions it re­ceived for far too long as it tried to probe for an­swers.

On Tues­day, agency of­fi­cials said the new rules will re­duce the need for that in­tru­sive screen­ing, or what it called “fact-in­ten­sive in­quiries,” be­cause the rules for what ac­tiv­i­ties cross the line will be clearer to both sides.

Rep. San­der M. Levin of Michi­gan, the rank­ing Demo­crat on the Ways and Means Com­mit­tee, said the rules are a “good first step” but he said he will want to take a closer look at what the IRS is propos­ing for voter regis­tra­tion drives.

Rep. Chris Van Hollen, a Mary­land Demo­crat who has pushed for more trans­parency in po­lit­i­cal groups’ ac­tiv­i­ties, said the prob­lem is that some po­lit­i­cal oper­a­tives are try­ing to hide their ac­tiv­i­ties be­hind the tax code.

Most of the groups form as “so­cial wel­fare” or­ga­ni­za­tions, which fall un­der sec­tion 501(c )(4) of the tax code. Those groups are al­lowed to en­gage in some po­lit­i­cal ac­tiv­ity, as long as it’s not their “pri­mary” pur­pose — but it has never been clear how much that means.

Some con­ser­va­tive groups have said the word “pri­mary” means they can spend as much as 49 per­cent of their money on pol­i­tics without run­ning afoul of the law.

Groups that or­ga­nize un­der sec­tion 501(c)(4) don’t have to re­port their donors pub­licly, which Mr. Van Hollen said al­lows them to shield them­selves.

“The pub­lic has a right to know who is spend­ing mil­lions to in­flu­ence the out­come of our elec­tions and we must put an end to this flow of se­cret money,” he said. He filed a law­suit in Au­gust to try to force the IRS to crack down on groups us­ing the tax code for po­lit­i­cal ac­tiv­i­ties.

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