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IRS Report Confirms Nonprofit Political Activity Guidelines Are Needed Now

Oct. 9, 2018

IRS Report Confirms Nonprofit Political Activity Guidelines Are Needed Now

Statement of Emily Peterson-Cassin, Bright Lines Project Coordinator, Public Citizen’s Congress Watch Division

Note: The U.S. Department of the Treasury Inspector General for Tax Administration published a report (PDF) that once again criticized the IRS for failing to adequately enforce the rules on nonprofit political activity and relying on subjective standards.

Public Citizen’s Bright Lines Project has worked for years to promote objective standards (PDF) for the IRS to judge what is and isn’t political activity that would make compliance and enforcement easier and help the IRS avoid repeatedly being called out by its own watchdog. Without objective standards, nonprofits willing to flout the rules will get a free pass, while the vast majority of nonprofits that want to follow the law will be left in the dark as to what is and isn’t permissible. We have needed better, clearer rules in this space for decades. Today’s report confirms that the time to act is now.

This report comes in the face of blatant signals from the Trump administration that it will not enforce the limits on partisan activity for nonprofits. In June, Vice President Mike Pence promised to repeal the Johnson Amendment – the law that keeps 501(c)(3)s from partisan election spending. And in July, the Treasury Department stopped requiring 501(c)(4)s to disclose major donors to the IRS, removing one of the only ways the IRS can see whether groups are illegally spending foreign money in our elections.

The IRS tried to put objective standards in place to solve these problems, but Congress stopped these efforts. A poison pill rider inserted into the 2015 government funding package – that has been carried through to today – blocked IRS and Treasury Department rulemakings that might have put in place objective standards. As Congress negotiates the Treasury Department’s funding (ahead of the Dec. 7 deadline), lawmakers need to remove this old rider and reject any new riders that would limit enforcement of the Johnson Amendment.