The Obama administration’s proposed crackdown on tea party and other nonprofit groups that want to play a role in politics is quietly crumbling as opposition builds across the political spectrum to new IRS rules.
Almost all of the nearly 70,000 public comments submitted as of Monday night were vehemently opposed to the proposal, which would limit the ability of social welfare nonprofits — those organized under 501(c)(4) of the tax code — to even talk about candidates in the two months before an election.
Conservatives have been battling the Internal Revenue Service, with the Republican-controlled House planning votes this week to try to halt the rules. But opposition from the other side of the political spectrum also is growing as liberal groups take a deeper look at the rules and realize they would affect more than just tea party and high-dollar conservative organizations.
The American Civil Liberties Union said the proposed rule “threatens to discourage or sterilize an enormous amount of political discourse in America.”
The Alliance for Justice, a coalition of more than 100 progressive groups, was opposed from the start. It led a signature drive on a letter asking the IRS to withdraw the series of changes, which it called “a very deep and troubling line in the sand.”
The League of Conservation Voters, one of the highest-spending nonprofits in the past election cycle, said it appreciates the IRS motives but worries that the agency is going too far.
“We have always been supportive of real reform that gets special interest money out of politics, and we welcome additional clarity. This is just the first step and, as always, the devil is in the details,” said David Willett, vice president of communications. “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.”
In the wake of the tea party targeting scandal, the IRS announced last year that it would try to rewrite rules to limit how much political activity nonprofits can do and still qualify for tax-exempt status.
Under the existing interpretation, groups that qualify cannot be focused primarily on campaigning. Many groups have interpreted that to mean they can spend 49 percent of their money on politics and not run afoul of the law.
In November, the IRS, arguing that too many groups are crossing the line, proposed rules that would limit everything from get-out-the-vote drives and voter guides that mention candidates or parties, to holding events attended by candidates — which could include a sitting member of Congress or even the president.
Cleta Mitchell, a conservative lawyer who is representing tea party groups that sued the IRS for the targeting scandal, said the rules were designed by the same people responsible for the tea party targeting scandal. But she said groups on all sides of the political spectrum are realizing they could be harmed.
“The ACLU’s comments filed a few weeks ago sent a shot across the bow and let liberal groups know it would be all right to speak out,” she said. “I think there was an effort through and by some powerful Democratic senators to intimidate liberal groups into keeping quiet, but that, thankfully, has not worked and more and more of those groups are publicly opposing the proposed rules.”
Ms. Mitchell is trying to pry loose from the IRS documents detailing how the agency came up with the proposal, and she said there are “so many legal and constitutional problems” with the agency’s proposal that she believes they can be stopped.
Still, some groups that could be affected have chosen to sit out the conversation.
The Natural Resources Defense Council, which has a 501(c)(4) arm, said it was taking a pass, while the National Council of La Raza said it hadn’t taken a look at the proposed rules. Neither Planned Parenthood nor the NAACP returned messages seeking comment on their views of the rules, which could affect both groups’ 501(c)(4) arms.
While the influence of special interest groups in politics always has been controversial, it became a major issue after the Supreme Court’s 2010 Citizens United decision, which opened the door for special interest groups to spend more freely in advocating their stances.
Since then, some groups have incorporated as 501(c)(4) organizations, which allows them to shield their donors from public view as long as they keep within the other rules on political activity.
Many liberal-leaning groups say there must be a way to outlaw big-money political nonprofits from abusing the system while preserving space for true public-interest nonprofits to continue to talk with voters.
But judging by the public comments submitted so far to the IRS, the agency has failed to find that balance.
The Washington Times looked at a sample of 200 comments, and 189 of them fully opposed the proposed rules, nine had mixed reactions and two were unintelligible. Not a single comment in the sample fully supported what the IRS was proposing.
The tally was running even more skewed against the IRS until the last few days, when the national League of Women Voters weighed in, offering a mixed reaction that many commenters have repeated.
When the IRS announced its rules proposal in November, the league initially seemed favorable. League President Elisabeth MacNamara said the group “could not be more thrilled” and called the rules a good first step.
But late last week, the league seemed to reverse course, submitting official comments for the record that said the league now feels its own ability to communicate with voters could be threatened by the proposed rules.
“The IRS proposal as it stands would jeopardize our work because it does not provide any exception for truly nonpartisan voter service activities like those carried out by the league,” the group said in its official public comment. “This is a terrible mistake, both for voters and for our democracy.”
Others were far less generous in their comments to the IRS.
One man, who identified himself as William Jones, summed up his opposition to the agency succinctly: “I hate you — end of message. <— that’s a period.”