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July 30, 2014

We Need Fewer Pointless Hearings, More Solutions

House Committee Ignores Possible IRS Solutions Already in the Works

WASHINGTON, D.C. – After 12 hearings on the Internal Revenue Service (IRS) targeting scandal and more than a year since news broke of the IRS’ use of inappropriate criteria to select groups applying for nonprofit status for extra scrutiny, the U.S. House Committee on Government Oversight finally held a hearing to ensure such a thing never happens again. Unfortunately, they ignored one of the most important solutions: an IRS rulemaking that is already underway.

In November of last year, the IRS proposed a rule attempting to provide clear guidance to 501(c)(4) organizations concerning what is and isn’t considered political. The proposed rule was flawed, garnering more than 150,000 public comments. One of those comments came from U.S. Reps. Darrell Issa (R-Calif.) and Jim Jordan (R-Ohio) urging the IRS to end the rulemaking completely even when the current subjective rules contributed to the targeting they seek to address. Fortunately, the IRS has decided to re-draft the proposed rule rather than withdraw it, and Public Citizen hopes this will lead to bright line rules to ensure ease of understanding for nonprofits.

“Nonprofits are in agreement that the first cut at defining political activity by the IRS needed big improvements,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “But the Oversight committee is using this hearing to propose unworkable changes to the IRS, rather than focusing on how to get the next version of the rulemaking right.”

The IRS’s current effort to revise the rules could lead to increased civic engagement by nonprofits. Clearer, fairer rules could encourage more democratic participation from small nonprofits that can’t spend valuable resources on high-priced lawyers to tell them what the IRS will or won’t consider political activity. A new draft of the rules is expected in early 2015.

“New rules will encourage the formation of law-abiding nonprofits,” said Emily Peterson-Cassin, Bright Lines Project coordinator. “No one who wants to form a nonprofit should be left out because they can’t pay for expensive lawyers to tell them what the rules are.”

Public Citizen’s Bright Lines Project has been working for years to craft bright-line rules that would apply to all nonprofits and encourage nonpartisan civic engagement while removing opportunities for abuse.

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