Months after it acknowledged improperly targeting conservative political groups for scrutiny, the Internal Revenue Service on Tuesday released new guidelines it said will clean up what sorts of activities count as political — but which critics said could end up stifling free speech even more.
The agency is trying to clean up after its own auditor said it asked intrusive questions and improperly delayed applications from tea party and conservative groups seeking tax-exempt status in the past three years.
The IRS said the new set of rules defining political activity is the first step, and still to come is another rule laying out just how much political activity is allowed before a nonprofit goes too far and loses the right to tax-exempt status.
“We are committed to getting this right before issuing final guidance that may affect a broad group of organizations,” said Mark J. Mazur, assistant secretary of the Treasury. “It will take time to work through the regulatory process and carefully consider all public feedback as we strive to ensure that the standards for tax-exemption are clear and can be applied consistently.”
Under the rules proposed Tuesday, groups would be considered to engage in politicking if they contribute to candidates or parties or advocate for their election or defeat. But so would distributing voter guides or even hosting a politician at an event, if it’s within 60 days of a general election.
Congress’ chief tax writer, House Ways and Means Committee Chairman Dave Camp, said the IRS was acting too quickly, particularly since there are several ongoing congressional investigations into how the agency treated the tea party.
“Before rushing forward with new rules, especially ones that appear to make it harder to engage in public debate, I would hope Treasury would let all the facts come out first,” the Michigan Republican said. “This smacks of the administration trying to shut down potential critics.”
And groups that were targeted by the IRS said the new rules appear to be an effort to blame poor wording in the law and the tea party groups themselves, rather than to blame the officials who oversaw the targeting.
House Oversight and Government Reform Committee Chairman Darrell E. Issa, who is also investigating the IRS, said the new rules will only hurt small grass-roots organizations, not the major labor unions or well-funded business groups that often back the Obama administration’s agenda.
“This is a crass political effort by the administration to get what political advantage they can, when they can,” the California Republican said.
The IRS ran into trouble when it decided to single out applications from tea party groups for special scrutiny. The agency sent many of those groups intrusive questions asking about books they were reading, guests they were hosting, names of group officers and, in some instances, about their links with other groups.
Auditors said those questions were out of bounds, and also said the agency was holding up many of the applications it received for far too long as it tried to probe for answers.
On Tuesday, agency officials said the new rules will reduce the need for that intrusive screening, or what it called “fact-intensive inquiries,” because the rules for what activities cross the line will be clearer to both sides.
Rep. Sander M. Levin of Michigan, the ranking Democrat on the Ways and Means Committee, said the rules are a “good first step” but he said he will want to take a closer look at what the IRS is proposing for voter registration drives.
Rep. Chris Van Hollen, a Maryland Democrat who has pushed for more transparency in political groups’ activities, said the problem is that some political operatives are trying to hide their activities behind the tax code.