The IRS is getting an earful as it weighs new rules on how to treat so-called “dark-money” nonprofit groups that are flooding the political scene.
The comment period for the proposed rules, which have exercised liberal and conservative groups alike, closed last week with the second highest total of comments for any proposal in the agency’s history, according to a survey by the Sunlight Foundation, a watchdog group.
The new rules, which would redefine and regulate political activities for nonprofit 501(c)(4) groups, received mostly critical comments from more than 143,000 people and organizations. The only proposal to generate more comments was the Obamacare contraceptive mandate, which received 165,000 comments.
The massive response surprised even veterans of the nation’s campaign finance battles.
A tweet from Citizens for Ethics and Responsibility in Washington (CREW) read, “We knew Americans cared about getting money out of politics, but the response to #IRS regulations is still stunning.”
The IRS and Treasury Department proposed the new rules after the fierce fallout over charges the tax agency targeted conservative and tea party groups for special scrutiny when they sought the 510(c)(4) nonprofit status. President Obama replaced the leadership at the IRS, but many Republicans charge the administration has been slow-walking the investigation into possible political abuse by higher level officials and the White House.
Current rules say such groups cannot be “primarily” a campaign organization, but groups such as the conservative Crossroads GPS and the Liberal Priorities USA obtained the designation because they do not have to disclose their donors.
According to the Sunlight Foundation report, most of the critical comments were generated from conservative nonprofit groups urging their supporters to speak up against the IRS plan. However, some liberal groups, including the Alliance for Justice and the American Civil Liberties Union, also voiced their disapproval.
High-ranking politicians also weighed in, including Sens. Ted Cruz, Texas Republican, and Richard Blumenthal, Connecticut Democrat. Even Comedy Central network faux news commentator, Stephen Colbert, put in his two cents.
According to the Sunlight Foundation, the highest number of comments, more than 17,000, came from the National Right to Work Committee, an anti-union group. More than 16,000 comments where filed by the American Family Association, a conservative Christian organization. Other groups that weighed in with large numbers included Americans for Prosperity, the National Pro-Life Alliance, the Faith and Freedom Coalition, NumbersUSA, True the Vote and the Homeschool Legal Defense Association.
Not all comments were critical of the proposed IRS regulation. Many watchdog organizations offered suggestions for changes to strengthen the rules, including the Sunlight Foundation, the Center for Responsive Politics, Common Cause and the League of Women Voters.
“This is a critically-important issue,” said Melanie Sloan, executive director of CREW. “No matter what the IRS does, it’s not going to affect the 2014 elections, but we are all going to see the increasing impact of ‘dark money’ and at some point the IRS needs to step in and do something.”
Last week, the House voted 241-176 to prevent the IRS from enforcing the new rules. But that is far short of the two-thirds majority needed to override a likely veto from President Obama.
The proposal has a long way to go before any rule is issued. At a February 26 hearing of a House Appropriations subcommittee, new IRS commissioner John Koskinen said the agency had a lot of reading to do before any decisions could be made.
“I think the chances of it getting finalized before the November election are fairly slim,” Mr. Koskinen said. “We have an overwhelming amount of comments to take into consideration.”
He added, “If there’s going to be a regulation — and I would say ‘if’ — nothing guarantees when you start the process, you end up with a product at the end.
If there’s going to be a regulation and it has changes in it, it would be very likely to be republished for more comments.”