Will Democrats Let The IRS Muzzle Their Own Liberal Grassroots?

Phil Kerpen

 by Phil Kerpen, Contributing Author: Next week the House will consider H.R. 3865, which would prohibit the IRS from rushing a final rule regulating 501(c)(4) organizations in the middle of the current tax year. If the floor debate looks like the bill’s markup in the Ways and Means Committee, it will be split right down party lines.

Republicans will condemn the IRS 501(c)(4) muzzle rule as a violation of free speech rights and an extension of the IRS targeting scandal by official means. Democrats will complain that the IRS targeting scandal has been exaggerated and insist the rule is an appropriate response to the horrors of “dark money.” They will say “Koch brothers” a lot. Then they will all vote to let the IRS proceed.

If that is indeed what happens, it will be a sad commentary on the extent to which Democratic House members are willing to ignore their constituents to serve as a rubber stamp for President Obama’s IRS – and a lifeline to the self-serving political interests of their endangered Senate colleagues.

Consider the official comments from the ACLU, which is extremely critical of the proposed IRS rule:

Most social welfare organizations - on both the left and right — serve exactly that function as they see it, the promotion of social welfare and community good. Based on their respective visions, they advocate for the powerless and the voiceless. They promote fiscal responsibility and good government. They serve as a check on government overreach, or as a cheerleader for sound public policy.

In many of these functions, social welfare organizations praise or criticize candidates for public office on the issues and they should be able to do so freely, without fear of losing or being denied tax-exempt status, even if doing so could influence a citizen’s vote. Such advocacy is at the heart of our representative democracy. To the extent it influences voting, it does so by promoting an informed citizenry.Or Cathy Duvall, the Sierra Club’s director of strategic partnerships, who told the Washington Post the proposed rule: “harms efforts that have nothing to do with politics, from our ability to communicate with our members about clean air and water to our efforts to educate the public about toxic pollution.”The liberal umbrella Alliance for Justice is even more critical:In its attempt to define what kinds of activity are “political” and therefore cannot be counted toward a 501(c)(4) nonprofit organization’s social welfare purpose, Treasury and the IRS drew a very deep and troubling line in the sand. Though the new definitions attempt to clarify existing rules, they also create a danger to citizen participation in our democracy.

If implemented, there would be no such thing as a nonpartisan election activity conducted by a 501(c)(4); it would all be considered “political.” By expanding the definition of what activities are political, the rules would drastically reduce the ability of (c)(4)s to engage in nonpartisan get-out-the-vote drives, candidate questionnaires, and voter registration drives. These activities have been critical to the ability of nonprofits to influence the public policy debate on a wealth of issues.

These regulations will not run 501(c)(4)s out of politics. Rather, the big players will hire lawyers and accountants to help them avoid the rules. Small players can’t afford this kind of assistance. As a result, much smaller groups may well be frozen out of legitimate citizen engagement. Creating an entirely distinct political organization to promote their policy agendas – new clean water laws or “no smoking” ordinances, for example — would be too costly and burdensome.In a devastating piece published on The Nation’s website, Alliance for Justice’s Nan Aron specifically debunks every one of the excuses Democrats offered in committee for opposing H.R. 3865. This one is particularly relevant:There is nothing in these rules that deals at all with disclosure of donors

If you’re worried about “dark” money and a lack of disclosure of donors, there is nothing in the regs about where the money for (c)(4)s comes from, and they don’t require any new level of disclosure. If the money was “dark” before, it will continue to be “dark” after.While the current proposed rule does not apply to labor unions, which are organized under 501(c)(5) of the tax code, the IRS did ask for comment on whether the same rules applied to 501(c)(4) organizations should also apply to 501(c)(5) groups.

Maintaining separate rules would be politically difficult, which is why SEIU’s associate general counsel has already weighed in, saying:

The rule is so broadly phrased and so categorical, it would be totally inappropriate for unions. It would seriously affect their ability to function as membership organizations.The League of Conservation Voters recently rang an alarm bell, saying:The devil is in the details. We want to make sure that any final rules do the right job of curtailing shadowy 'c4s' and don't end up hurting legitimate groups who represent large public constituencies.The League of Women Voters is also concerned:They lumped everybody together… the 60-day thing is a problem. For a November election, you could only do things in September, (when) people are barely back to work from the summer. They're not paying attention to elections yet.As grassroots activists across the political spectrum have flooded the docket with an unprecedented number of comments opposing the proposed rule, the liberal group Common Cause sent out a call to its activists warning: “Tea Party groups are flooding the agency with comments.” Yet, remarkably, even Common Cause notes in its model comments that the rule as proposed is flawed:At the same time, the proposed rules are imperfect because they count critical civic engagement efforts like nonpartisan voter registration and nonpartisan get-out-the-vote activities as “candidate-related political activity” and should be exempted from the definition.While many liberals would like to see IRS rulemaking in this area, there is not a single group that is comfortable with the current proposed rule. Not one. So what's the harm in slowing this rulemaking down?

H.R. 3865 only prohibits the IRS from issuing a final rule in the middle of the current tax year. It does not stop them from moving forward in a deliberate way, giving due consideration to these serious concerns from the public. The bill would ensure that the agency does not regulate prematurely, trampling the rights of liberal grassroots groups as well as conservatives.

We know why Senate Democrats want the IRS to muzzle 501(c)(4) groups as soon as possible. Next week we’ll find out if there are any House Democrats who are willing to stand up for their constituents and slow down the IRS’s rush to regulate.
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Phil Kerpen is president of American Commitment  He is on Twitter and on Facebook. Kerpen is the author of Democracy Denied: How Obama is Bypassing Congress to Radically Transform America – and How to Stop Him and is a contributing author for the ARRA News Service. 

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