Obama responds to IRS abuse scandal by adding more regulations to abuse

posted at 8:51 pm on November 26, 2013 by Mary Katharine Ham

The problem with the IRS abuse scandal, in which the government agency was found to be systematically discriminating against conservative non-profits, is that a complex and vague campaign finance law system gives the government powers it shouldn’t have to decide which citizens are worthy of organizing for political speech and which are not. Lois Lerner, whose boss is an ideological president who was constantly saying Tea Party groups were doing shady things with their money, was in a position to make value judgments about what kind of political speech should be allowed the favor of the federal government. That’s a bad idea.

But not to the aforementioned ideological president whose solution to this is to put more power in bureaucrats’ hands to regulate political speech. Yay!

In an aggressive move designed to crack down on free-spending outside political groups, the Obama administration is proposing strict new rules curtailing nonprofits like Karl Rove’s Crossroads GPS and the pro-Obama Priorities USA.

The draft proposal, released Tuesday by the Treasury Department, would keep so-called social welfare 501(c)(4) nonprofits from getting a tax exemption if they engage in too much “candidate related” political activity.

The groups were at the heart of this summer’s scandal over Internal Revenue Service targeting of tea party and other conservative groups seeking tax exemptions.

Hey, I’m sure it’ll all go swimmingly this time and no one will ever abuse their power again in deciding who gets fancy treatment from the government and who doesn’t. The IRS inspector general recommended a tightening of the rules.

The new regulations would affect a broad swath of political nonprofit groups that have come to play an outsized and influential role in federal elections.

Crossroads, founded by George W. Bush adviser Rove, along with its sister super PAC together spent $325 million in 2011 and 2012 against Obama and Senate Democrats. Priorities, set up by former Obama aide Bill Burton, raised $10.7 million in the 2012 cycle.

Dozens of these political nonprofits have used 501(c)(4) tax status as a way to shield their donors.

These groups can spend millions to back federal candidates and run issue ads because of ambiguity and uncertainty about the current IRS rules governing political spending by 501(c)(4)s.

These groups can spend millions to back federal candidates and run issue ads because of free speech. Fixed that for you. This time, the government is going to give us a much better definition of social welfare, you see, and that’ll fix everything.

The new draft Treasury and IRS regulations would explicitly exempt certain political activity on behalf of candidates as counting toward the promotion of “social welfare.”

For example, candidate-related political activity includes communications within 60 days of a general election clearly identifying a candidate or party.

It’s remarkable how scared of unleashing free speech campaign finance types are. Behold the fear:

“The abuse of social welfare groups for political activity has been an embarrassment to our democratic system. Too often, 501s have simply become a front for corporate political mobsters to anonymously exert their power over our elections,” Orton said.

”What this will do is establish a clearer regime,” said Lisa Gilbert, director of Public Citizen’s Congress Watch program. Public Citizen has been pushing the IRS to establish clearer guidelines concerning nonprofits for years.

Gilbert added that the IRS should also address the role that other 501(c) groups can play in politics — including 501(c)(6) groups which include chambers of commerce and business leagues.

More to come. Goody.

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