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IRS Plan to Revise Proposed Rules for Nonprofits Is Welcome News

April 15, 2014

IRS Plan to Revise Proposed Rules for Nonprofits Is Welcome News

Public Will Have Another Opportunity to Comment

WASHINGTON, D.C. – A plan by the IRS to revise and re-propose new rules about nonprofit political activity is welcome news for the many organizations that encouraged the IRS to continue the rulemaking process and improve the original proposal, Public Citizen said today.

IRS Commissioner John Koskinen broke the news Monday of the agency’s plans in an interview with USA Today.

The IRS in November 2013 proposed new rules for 501(c)(4) “social welfare” organizations that seek to resolve the ambiguity of the current, vague, “facts and circumstances” test for political activity. The current regime has allowed 501(c)(4)s to keep their tax-exempt status while spending millions of dollars in “dark money” on elections without disclosing their donors.

Sixty-seven percent of organizations that commented or signed on to comments to the proposed IRS rule asked that the rulemaking continue, according to a Public Citizen analysis. Nearly all of those comments also asked that the proposed rule be revised. In the interview, Koskinen said that if the proposed rules are revised, the public will have another opportunity to comment.

“This is a real victory for the public and groups most affected by the proposed rule,” said Emily Peterson-Cassin, Public Citizen’s Bright Lines Project coordinator. “The IRS has a great opportunity to provide an objective and easy-to-follow definition of political activity for nonprofits, and it’s encouraging that the agency is continuing the process as most organizations requested.”

The Bright Lines Project has been working for years to create clear, fair rules that would apply to all nonprofits and would encourage nonpartisan civic engagement while removing opportunities for abuse.