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Censorship Through the Tax Code: The Obama Administration Unveils New Rules That Discourage Political Activity

January 30, 2014 in Economics

By Trevor Burrus

Trevor Burrus

The Obama administration has launched the first attack in a carefully planned war on conservative and libertarian political speech. In November, the IRS proposed “clarifying” the rules that govern the political activity of 501(c)(4) “social welfare” groups, many of which have been branded by the left as nefarious “dark money” cabals. By clarifying the rules, the IRS hopes to provide guidance on how much, and what kind, of political activity (c)(4)s can engage in. In reality, the IRS is using the tax code to discourage conservative political speech.

There are of course both liberal and conservative (c)(4)s, but, since 2010, conservative (c)(4)s and other “outside money” groups have greatly outspent liberal ones. Coming from a president who has publicly chided conservative (c)(4)s for not revealing their donors, it is not surprising that he would turn to the ultimate bully in the bully pulpit: the IRS.

Let’s take a step back. In order to have (c)(4) status, an organization must be organized “primarily” around social welfare and community activity. For decades, this language has been interpreted by lawyers to mean that a (c)(4) can’t spend more than 50 percent of its funds on political activity, and the IRS largely went along with that rule of thumb. Of course, the next question is: “what is ‘political activity’?” And it is here these clarifying rules become a thinly disguised political power game.

The IRS is using the tax code to discourage conservative political speech.”

Under the proposed rules, “candidate-related political activity” now includes nearly everything that most (c)(4)s do, including voter registration, voter guides, grassroots lobbying, events where candidates appear, candidate debates, and issue advocacy. This means that many (c)(4)s would have to count nearly all their activities as political spending, even though the rules remain unclear on what percentage of spending can be on “candidate-related political activity.” Not coincidentally, the new rules don’t apply to labor unions, which are not (c)(4)s and therefore can still do all those things without running afoul of the IRS.

Want to create a (c)(4) to organize a grassroots campaign to encourage voters to email their member of Congress to oppose the Farm Bill? That is now a “candidate-related political activity” and must be included as part of your organization’s political spending. Want to hold a voter registration drive that doesn’t mention any candidates? That is also considered “candidate-related political activity” under the proposed rules. …read more

Source: OP-EDS

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