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White House Vows to Kill Bill That Would Block New IRS 501(c)(4) Rules

OMB says bill "could prevent the IRS from administering the tax code more effectively" when it comes to previously targeted groups.

by
Bridget Johnson

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February 25, 2014 - 5:25 pm
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WASHINGTON — The White House threatened to veto a House bill that would block the Internal Revenue Service from issuing a rule that would narrow the definition of who qualifies for a 501(c)(4) exemption as a social welfare organization.

Ways and Means Committee Chairman Dave Camp’s (R-Mich.) Stop Targeting of Political Beliefs by the IRS Act, which was in the Rules Committee on Tuesday evening, would freeze the finalization of the rule for one year and restore the 501(c)(4) standards and definitions that were in place before conservative groups started to come under extra scrutiny in 2010.

Shortly after the Rules Committee meeting began, the Office of Management and Budget issued a statement warning that the administration “strongly opposes” the bill, which has 66 co-sponsors.

“Under current law, organizations qualify as tax-exempt organizations ‘operated exclusively for the promotion of social welfare’ if they are primarily engaged in promoting in some way the common good and general welfare of the people. The relevant Treasury and IRS rules have been in place since 1959 and are broadly recognized as unclear,” the OMB said in the veto threat. “The proposed legislation would prevent any revisions or clarifications to those rules. Thus, it could prevent the IRS from administering the tax code more effectively and from providing greater clarity to organizations seeking tax-exempt status.”

The proposed guidance defines the term “candidate-related political activity,” and would amend current regulations by indicating that the promotion of social welfare does not include this type of activity, according to the IRS, which said the intention is to “reduce the need to conduct fact-intensive inquiries by replacing this test with more definitive rules.”

Activities that would disqualify an organization seeking 501(c)(4) status include “communications that expressly advocate for a clearly identified political candidate or candidates of a political party,” “any contribution that is recognized under campaign finance law as a reportable contribution,” hosting a candidate at an event within 60 days of a general election, and voter registration or “get-out-the-vote” drives.

The OMB called the IRS proposal “the first step in a standard rulemaking process intended to clarify the rules and to provide greater certainty for organizations seeking tax-exempt status.”

“The notice and comment process allows for all concerned parties to provide input and comments before any changes to the rules are effected. Treasury and the IRS will carefully consider any and all such comments before issuing any further guidance, and they will follow standard agency rulemaking procedures,” the OMB said. “If the President were presented with H.R. 3865, his senior advisors would recommend that he veto the bill.”

Public comments close on Thursday, and can be submitted here.

The bill is being brought to the House floor as part of the Republican Conference’s Stop Government Abuse Week, which is also highlighting the Unfunded Mandates Information and Transparency Act of 2013 and the Regulatory Flexibility Improvements Act.

On Tuesday the House passed Rep. Pete Roskam’s (R-Ill.) Taxpayer Transparency and Efficient Audit Act, which would require the IRS to alert taxpayers when their information is shared with other federal agencies, and the Protecting Taxpayers from Intrusive IRS Requests Act, which bars the IRS from inquiring about a taxpayer’s religious, political or social beliefs.

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Top Rated Comments   
Defund fascism.

Or change the motto on the currency. " In Fraud We Trust"

If Congress won't defund the fascist assault on taxpayers there is only one other group that can defund tyranny.

Taxpayers...becoming non-taxpayers. If the representatives won't represent their viciously attacked constituency...then those victims must protect themselves. Taxation without representation has an historical pride of honor and principle on these shores.

Defund fascism. Preferably through Congress...but these tyrants have no clue what massive "redistribution" looks like, if the "haves" decide they have had just about enough of being abused.

And, they have NO clue how "transforming" a mass protest by the victims of tyranny can be.

Defund fascism.
29 weeks ago
29 weeks ago Link To Comment
Can we call Obama a Fascist yet? If not, how much more will it taket? Will he have to grow a little mustache and start speaking Austrian?
29 weeks ago
29 weeks ago Link To Comment
I would encourage the Republicans to pass the bill even if Obama veto's it. I would take ads out in every district where a representative (or state for the Senators) opposed the bill. Let saturate for a month, then try to get a veto proof majority bill passed.
29 weeks ago
29 weeks ago Link To Comment
All Comments   (39)
All Comments   (39)
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The official White House stance is apparently, “We didn’t do anything wrong, but we’re mot going to let you stop us from continuing to do it.”
29 weeks ago
29 weeks ago Link To Comment
http://pjmedia.com/blog/white-house-vows-to-kill-bill-that-would-block-new-irs-501c4-rules/?show-at-comment=526469#comment-526469
Kensu Ani, The Senate can't force anything past the House either so it depends upon what you want to do. If we want to do something like curbing the NSA abuses, we can find people in the other aisle to work with to get a passed bill to President Obama. With both houses in support, there is a greater chance to get him to sign it. Otherwise we are just grandstanding to no appreciable effect.
29 weeks ago
29 weeks ago Link To Comment
I'm not sure what to say about this. The reason I'm perplexed is folks act like this is some kind of surprise. I guess I'm too damned practical. It should have been no surprise that anybody with half a brain is going to take something with a little ambiguity to it and provide a much clearer regulation that they can act on. If they didn't, they would be eaten alive by 37 different auditors, examiners and IGs. It was obvious to me months ago that IRS management had failed to give the United ruling proper attention. Ambiguity is a great bureaucratic principle, but so is nice neat yes-no regulations. Those 501 definitions were far too ambiguous and Congress, who was expected by most folks to provide some structure did not.

I see a lot of comments here where folks do not have any idea of how Civil Service works and of the IRS's somewhat unique place in it. I'm all for more transparency with privacy safeguards because I'm always for more transparency. I really like a government that I know more about what it's doing than it knows about what I'm doing. However, I will say I'm for more effective and more efficient IRS. They need more folks giving attention to fraud and tax cheats. I'm open on tax rates and structure and tax law changes, however for where it is right now, I'm all for taxes due being paid, and I'll confess it angers me to see our Congress who have cut off far more than their noses and toes in ignorant fits like children have and think they are punishing their parents. The fits thrown by these regressives have the effect of saving the pennies because they don't want pay someone to grab the dollars.
29 weeks ago
29 weeks ago Link To Comment
This bill is a waste of the paper it was written on. It will never pass the Senate and is sure to be vetoed. The House should invest their time in passing bills that have a chance of accomplishing something other than political grandstanding.
29 weeks ago
29 weeks ago Link To Comment
Nothing will get through the Senate unless Reid wants it to, which means that the only way to pass bills is to let the Democrats win. What you are suggesting is that the we should just capitulate to the Democratic Senatorial rule.
29 weeks ago
29 weeks ago Link To Comment
Right. Submit a negative comment on the new IRS regs and prepare to be audited.
29 weeks ago
29 weeks ago Link To Comment
Since Congress did not make the new, tighter rules that the IRS intends to impose, than those rules are NOT legitimate. But I'm preaching to the choir here, aren't I?

Congress shouldn't even have to, in a constitutionally-based environment, pass a bill to block rule-making that is not legitimate in the first place.
29 weeks ago
29 weeks ago Link To Comment
I see the F word being thrown around here. I prefer the term protofascist for reasons I explained here: http://clarespark.com/2012/09/05/proto-fascism-and-the-democrat-peoples-community/. If the Democrat Party continues to win elections, I expect full blown friendly fascism.
29 weeks ago
29 weeks ago Link To Comment
What they miss is the "Tea Party" is not a political party in traditional terms. It is millions of Americans, whether associated with a Tea party group or not, who want to take back the country from the progressive leftists.
29 weeks ago
29 weeks ago Link To Comment
"Killing the Tea Party is their top priority."

Are you talking about the Democrats, the GOP leadership, or both?
29 weeks ago
29 weeks ago Link To Comment
I'd take issue with the second group of your comment, but unfortunately the RINOs are making their case as well, throwing in their lot against the Tea Party.
29 weeks ago
29 weeks ago Link To Comment
The Tax-Bandits Ride Again

“An error lurking in the roots of a system of thought does not become truth simply by being evolved.”
- John Frederick Peifer

In The USA, the first tax-return in 1914 was one page in length. The highest marginal rate was 7%. In the dollar of today, that highest rate began at a taxable income of $11-million. By 1917, the highest marginal rate had accelerated to 75%; later to more than 90%.

Who are the villains? Those being taxed, or those taxing?

Tax-avoidance is not tax-evasion. Tax avoidance is legal and established by the tax-bandits themselves.

Corporations are not people. Corporate taxation is double-taxation. In the end, people, as consumers, pay anyway.

The only true way to reform the income-tax is to end it (www.inescapableconsequences.com). End it? With 50% of Americans, for example, paying no federal income tax?
29 weeks ago
29 weeks ago Link To Comment
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