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IRS says planned tea party crackdown rules won’t be in place by November
The IRS said Wednesday its new proposal to crack down on tea party and other nonprofit groups won’t be ready before the November elections — even as House Republicans voted to halt the entire process for the next year, arguing the tax agency hasn’t even learned the lessons of its previous problems.
John Koskinen, the new IRS commissioner, said he’s not even sure there will be an eventual rule cracking down on political activity. The agency is trying to write one, but its initial suggestions have drawn tens of thousands of angry comments, and he said they have many other steps to do — including a public hearing and possibly another round of public comment — before they would impose new rules.
“I think the chances of it getting finalized before the November election are fairly slim,” he told the House Appropriations Committee.
Under the IRS’s vision, released last year, social welfare nonprofits would be limited in the political activities they could engage in — including running get-out-the-vote drives, hosting officials in the months leading up to an election or issuing voter guides.
Those proposals have irked both liberal and conservative groups.
Hours after Mr. Koskinen testified to Congress, the House voted 243-176 to impose the one-year halt on the rule-making. Fourteen Democrats joined Republicans in voting for the delay.
“Frankly, it’s a cowardly act to silence people via backroom regulations,” said House Majority Leader Eric Cantor, Virginia Republican.
The White House has already issued a threat that Mr. Obama would veto the bill if it were to reach him — and it’s unlikely the Senate would ever give him the chance, with Democrats controlling that chamber eager to crack down on what they see as abuse of the nonprofit system.
The IRS has come under scrutiny after an internal audit last year found the agency improperly targeted tea party and conservative groups’ nonprofit applications, giving them special scrutiny, asking inappropriate questions and in some cases holding up approval for years.
Several lawsuits have been filed and are proceeding through the courts.
Congressional Democrats say that while some of the probing was improper, there’s no evidence it was politically motivated. Indeed, the IRS has blamed its behavior on confusion it says stems from the rules governing nonprofits formed under section 501(c )(4) of the tax code, which governs social welfare organizations.
The new rules the IRS wants would bring more clarity — but also eliminate a lot of activities that groups on both sides of the aisle engage in right now.
A number of congressional committees are also looking into the initial tea party targeting, and Mr. Koskinen said he hoped those would be wrapped up soon.
Republicans said the IRS should wait for those investigations to conclude before deciding on new rules. But Democrats drew the opposite conclusion, saying the GOP should wait for the results of the investigations before trying to block the IRS.
In a letter to Democrats, Mr. Koskinen said the IRS has spent at least $14 million to comply with those investigations — $8 million in salaries and costs for the 255 IRS employees involved, and at least $6 million more for the technology required to process the documents.
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