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National: House approves Koch-backed bill to shield donors’ names | USA Today

The House approved a bill Tuesday that would bar the IRS from collecting the names of donors to tax-exempt groups, prompting warnings from campaign-finance watchdogs that it could lead to foreign interests illegally infiltrating American elections. The measure, which has the support of House Speaker Paul Ryan, R-Wis., also pits the Obama administration against one of the most powerful figures in Republican politics, billionaire industrialist Charles Koch. Koch’s donor network channels hundreds of millions of dollars each year into groups that largely use anonymous donations to shape policies on everything from health care to tax subsidies. Its leaders have urged the Republican-controlled Congress to clamp down on the IRS, citing free-speech concerns.

Full Article: House approves Koch-backed bill to shield donors’ names.

Editorials: The I.R.S. Gives Up on ‘Dark Money’ | The New York Times

The federal government has all but surrendered to the powerful, rich donors whose anonymous contributions threaten to undermine the 2016 elections. The commissioner of the Internal Revenue Service, John Koskinen, signaled as much on Thursday when he told a House committee that there would be no change in the tax code in 2016 to end its growing abuse by political operatives using nonprofit “social welfare” institutions to disguise the identities of affluent campaign contributors. “I don’t want people thinking we are trying to get these regs done so we can influence the election,” Mr. Koskinen declared later to reporters. The statement was remarkable for blessing further procrastination at the I.R.S., whose clear obligation is to enforce existing law in a way that would end the current flood of “dark money” financing politics.

Full Article: The I.R.S. Gives Up on ‘Dark Money’ - The New York Times.

National: I.R.S. Expected to Stand Aside as Nonprofits Increase Role in 2016 Race | The New York Times

As presidential candidates find new ways to exploit secret donations from tax-exempt groups, hobbled regulators at the Internal Revenue Service appear certain to delay trying to curb widespread abuses at nonprofits until after the 2016 election. In a shift from past elections, at least eight Republican presidential candidates, including leading contenders like Jeb Bush and Senator Marco Rubio of Florida, have aligned with nonprofit groups set up to raise hundreds of millions of dollars. Hillary Rodham Clinton’s supporters are considering a similar tactic. Some of these so-called social welfare nonprofit groups are already planning political initiatives, including a $1 million advertising campaign about Iran by a tax-exempt group supporting Mr. Rubio.

Full Article: I.R.S. Expected to Stand Aside as Nonprofits Increase Role in 2016 Race - The New York Times.

National: New IRS Rules on Dark Money Likely Won’t Be Ready Before 2016 Election | ProPublica

The Internal Revenue Service says it won’t come out with new proposed rules for so-called dark money groups until late spring at the earliest, increasing the likelihood that no changes will take effect before the 2016 elections. These groups 2014 social welfare nonprofits that can engage in politics, but do not have to disclose their donors 2014 have become a major force in elections, pouring at least $257 million into the 2012 elections. The Wesleyan Media Project estimates that dark money paid for almost half the TV ads aired in the 2014 Senate races. The IRS originally issued a draft version of the rules for dark money groups more than a year ago, but withdrew them for revisions after receiving intense criticism from both ends of the political spectrum.

Full Article: New IRS Rules on Dark Money Likely Won't Be Ready Before 2016 Election.

National: New IRS Rules on Dark Money Won’t Be Ready By 2016 | Pacific Standard

The Internal Revenue Service says it won’t come out with new proposed rules for so-called dark money groups until late spring at the earliest, increasing the likelihood that no changes will take effect before the 2016 elections. These groups—social welfare non-profits that can engage in politics, but do not have to disclose their donors—have become a major force in elections, pouring at least $257 million into the 2012 elections. The Wesleyan Media Project estimates that dark money paid for almost half the TV ads aired in the 2014 Senate races. The IRS originally issued a draft version of the rules for dark money groups more than a year ago, but withdrew them for revisions after receiving intense criticism from both ends of the political spectrum. It’s unknown how aggressive the IRS’ new proposal will be in attempting to rein in political activity by social welfare non-profits. Some observers expect the agency to set a hard limit on how much of groups’ spending can be devoted to politics, perhaps 40 percent or less.

Full Article: New IRS Rules on Dark Money Won't Be Ready By 2016 - Pacific Standard: The Science of Society.

National: New IRS Rules on Dark Money Likely Won’t Be Ready Before 2016 Election | ProPublica

The Internal Revenue Service says it won’t come out with new proposed rules for so-called dark money groups until late spring at the earliest, increasing the likelihood that no changes will take effect before the 2016 elections. These groups — social welfare nonprofits that can engage in politics, but do not have to disclose their donors — have become a major force in elections, pouring at least $257 million into the 2012 elections. The Wesleyan Media Project estimates that dark money paid for almost half the TV ads aired in the 2014 Senate races. The IRS originally issued a draft version of the rules for dark money groups more than a year ago, but withdrew them for revisions after receiving intense criticism from both ends of the political spectrum. Some advocates of campaign finance reform have touted tighter IRS controls as the best shot of reining in the influence of such groups ahead of the 2016 presidential race.

Full Article: New IRS Rules on Dark Money Likely Won’t Be Ready Before 2016 Election - ProPublica.

National: Inquiry Into I.R.S. Lapses Shows No Links to White House | New York Times

An 18-month congressional investigation into the Internal Revenue Service’s mistreatment of conservative political groups seeking tax exemptions failed to show coordination between agency officials and political operatives in the White House, according to a report released on Tuesday. The I.R.S. has admitted that before the 2012 election it inappropriately delayed approval of tax exemption applications by groups affiliated with the Tea Party movement, but the I.R.S. and its parent agency, the Treasury Department, have said that the errors were not motivated by partisanship. Republican lawmakers, dismissing the Obama administration’s denials, have suggested that the delays were not only politically motivated but also orchestrated by the White House. Some of the most strident comments have come from Representative Darrell Issa, Republican of California and the chairman of the House Oversight Committee, which has issued subpoenas to compel testimony from administration officials and held a series of tumultuous hearings on the I.R.S. scandal.

Full Article: Inquiry Into I.R.S. Lapses Shows No Links to White House - NYTimes.com.

National: IRS rules to close campaign loopholes are slammed from multiple sides | The Boston Globe

The Internal Revenue Service, one of the most beleaguered federal agencies, is seeking to assume a new role in regulating election financing. And the reaction, perhaps predictably, has been critical. Many of the nearly 67,000 comments following the IRS’ proposal to rein in politically active nonprofits urge the organization to focus on its day job: tax collection. “It sounds to me like the IRS is making law, not enforcing it. Leave rule-making to the buffoons in Congress,” one comment reads. Another puts it more bluntly: “Stick to taxes.” The public opposition comes from both liberals and conservatives, who are blasting draft regulations released by the Treasury Department in November that would tighten restrictions on political spending by nonprofit “social welfare’’ organizations, formally called 501(c)(4) groups under a section in the tax code.

Full Article: IRS rules to close campaign loopholes are slammed from multiple sides - Politics - The Boston Globe.

National: The IRS Swings on Dark Money but Misses the Target | The Nation

If you’re concerned about “dark money” in politics and the tsunami of cash from the super-wealthy and corporations pouring into the political system, or if you were outraged by the recent “scandal” involving the IRS’s clumsy assessment of 501(c)(4) groups, your ears probably perked up when you heard that the Internal Revenue Service has issued draft regulations to “provide clarity” to the rules that govern so-called “social welfare” organizations. Yet the new regs will do almost nothing to fix the things you think are broken and may, in fact, do some real damage to the ability of everyday Americans to have an impact on the political process. The proposed rules cover 501(c)(4) groups, named for the section of the tax code that governs them. Although this is the segment of the nonprofit world best known for notorious organizations like Karl Rove’s Crossroads GPS, it is actually made up of over 86,000 mostly small organizations nationwide, some of which are almost certainly active participants in your own community’s civic life. They weren’t invented in the last election cycle; they’ve been around for generations. Their purpose isn’t to hide donors but to advance policies. The big, famous guys and the shady newcomers get all the attention, but they aren’t typical of the sector, any more than Lady Gaga and Justin Bieber reflect the experience of the bulk of the people making a living in the music industry.

Full Article: The IRS Swings on Dark Money but Misses the Target | The Nation.

National: IRS tea party hearing veers into voting rights debate | POLITICO.com

A conservative group claiming it was targeted by the Internal Revenue Service stole the show at a congressional hearing on Thursday when it veered off topic and accused top panel Democrat Rep. Elijah Cummings of harassment. Catherine Engelbrecht, president of True the Vote, complained that Cummings, ranking member of the House Oversight and Government Reform Committee “sent letters to True the Vote, demanding much of the same information the IRS had requested” after she filed for nonprofit status and then “would appear on cable news and publicly defame me and my organization.” Democrats called it outrageous that Republicans gave the group a platform to attack a member, and even some Republicans tried to change the subject back to the IRS controversy itself.

Full Article: IRS tea party hearing veers into voting rights debate - Rachael Bade - POLITICO.com.

National: The IRS Moves to Limit Dark Money – But Enforcement Still a Question | ProPublica

The IRS and Treasury Department announced proposed guidelines clarifying the definition of political activities for social welfare nonprofits Tuesday afternoon, a move that could restrict the spending of the dark money groups that dumped more than $254 million of anonymous money into the 2012 elections. Read the guidelines here. However, the guidelines, which finally define what constitutes “candidate-related political activity,” aren’t a done deal. They will take some time for public comment and debate, and more time to finalize. (The IRS asks that all comments and requests for a public hearing be submitted by Feb. 27.) Experts also cautioned that the real test of oversight on the political spending by nonprofits will be how these regulations are enforced, something that the IRS has been so far reticent to do.  

Full Article: The IRS Moves to Limit Dark Money – But Enforcement Still a Question - ProPublica.

California: Ballot measure money not political under IRS loophole | news10

It’s considered the equalizer for the most-talked about organizations in politics: an IRS requirement that 501(c)(4) ‘social welfare’ groups spent less than half their cash on politics. But experts say the IRS left a big loophole that could play out big time in California: ballot measure spending isn’t considered political. “You could have a nonprofit doing virtually no traditional charitable work at all and really just being a funnel for campaign funds,” says Gary Winuk, the chief enforcement officer of the state’s Fair Political Practices Commission. The existence of the loophole is understandable; few states have an initiative system that allows voters to write their own laws.  And even fewer have a system that’s used as often, and costs as much, as the one in California. Even so, it’s a loophole not widely publicized and likely to gain more attention as 501(c)(4) groups turn more of their attention — and money — to the Golden State.

Full Article: Ballot measure money not political under IRS loophole | news10.net.

National: Van Hollen files suit against IRS over tax-exemption rules | The Washington Post

A top House Democrat plans to file a lawsuit in federal district court Wednesday challenging the Internal Revenue Service’s interpretation of a law that governs whether groups qualify for tax-exempt status as so-called social welfare organizations. Rep. Chris Van Hollen (D-Md.), the ranking member of the House Budget Committee, said Tuesday that he will serve as lead plaintiff in the case, which addresses one of the main concerns that surfaced with the recent IRS targeting controversy: differences between federal law and the IRS rules on eligibility for 501(c)(4) candidates. Current law says the organizations must engage “exclusively” in social welfare activities, but IRS tax code requires only that they are “primarily engaged” in such purposes. That discrepancy has led to confusion for application processors, who have struggled to determine what constitutes political activity and how much should disqualify groups from tax-exemption, according to agency officials.

Full Article: Top Democrat files suit against IRS over tax-exemption rules - The Washington Post.

National: IRS scrutinized some liberal groups | Politico

After a political group in Texas asked the IRS for a tax exemption last year, it got a lengthy, time-consuming list of questions — like a request for the minutes of all the board meetings since the group got started. And a California-based group got turned down completely in 2011, because the IRS concluded that it was set up “primarily for the benefit of a political party.” These two stories sound like they’d fit right into the raging IRS scandal over its treatment of conservative groups that applied for tax-exempt status. The only difference: these two groups — Progress Texas and Emerge America — were unabashedly liberal. POLITICO surveyed the liberal groups from an IRS list of advocacy organizations that were approved after the tougher examinations started. The review found some examples of liberal groups facing scrutiny similar to their conservative counterparts — they were asked for copies of web pages, actions alerts, and written materials from all of their events.

Full Article: IRS scrutinized some liberal groups - David Nather - POLITICO.com.

National: IRS Employees Showed No Politics, Lawmakers’ Memo Shows | Bloomberg

Interviews with 15 U.S. Internal Revenue Service employees show no political motivation or White House involvement in targeting groups applying for tax-exempt status, House Democrats said in a memo. The 36-page memo released by Democrats on the House Oversight and Government Reform Committee includes excerpts from several employee interviews with congressional investigators that haven’t been distributed publicly until today. The IRS has apologized for the delays and selective scrutiny given to Tea Party groups applying for nonprofit status. Democrats in Congress have resisted Republican arguments that IRS employees used their positions to harm Republican-leaning groups. Instead, they maintain that Tea Party groups were the victims of inadequate rules and inadvertent bungling.

Full Article: IRS Employees Showed No Politics, Lawmakers’ Memo Shows - Bloomberg.

National: Congress Recalls Watchdog to Explain IRS Audit | New York Times

The investigator who wrote a scathing report about the Internal Revenue Service targeting conservative political groups is heading back to Capitol Hill as a key House Democrat says his committee’s investigation has found no evidence of political bias at the agency. IRS inspector general J. Russell George is to testify Thursday before the House Oversight and Government Reform Committee, along with two IRS workers who have been interviewed as part of the committee’s investigation. George has been criticized by some congressional Democrats who say his report failed to mention that some liberal groups were targeted, too. Rep. Elijah Cummings, D-Md., released a memo Tuesday saying that interviews with 15 IRS employees and reviews of thousands of emails reveal no evidence of political bias by IRS workers. The memo said there is also no evidence that anyone outside the IRS directed the targeting.

Full Article: Congress Recalls Watchdog to Explain IRS Audit - NYTimes.com.

National: IRS delayed action on progressive groups, too | Associated Press

Leaders of progressive groups say they, too, faced long delays in getting the Internal Revenue Service to approve their applications for tax-exempt status but were not subjected to the same level of scrutiny that tea party groups complained about. Several progressive groups said it took more than a year for the IRS to approve their status while others are still waiting as IRS agents press for details about their activities. The delays have made it difficult for the groups to raise money — just as it has for tea party groups that were singled out for extra scrutiny. But even with the delays, leaders of some progressive groups said they didn’t feel like they were being targeted. “This is kind of what you expect. You expect it to take a year or more to get your status because that’s just what the IRS goes through to do it,” said Maryann Martindale, executive director of Alliance for a Better Utah, a small non-profit that advocates for progressive causes. “So I don’t know that we feel particularly targeted.”

Full Article: IRS delayed action on progressive groups, too.

National: Documents show IRS also screened liberal groups | Associated Press

The Internal Revenue Service’s screening of groups seeking tax-exempt status was broader and lasted longer than has been previously disclosed, the new head of the agency acknowledged Monday. Terms including ‘‘Israel,’’ ‘’Progressive’’ and ‘‘Occupy’’ were used by agency workers to help pick groups for closer examination, according to an internal IRS document obtained by The Associated Press. The IRS has been under fire since last month after admitting it targeted tea party and other conservative groups that wanted the tax-exempt designation for tough examinations. While investigators have said that agency screening for those groups had stopped in May 2012, Monday’s revelations made it clear that screening for other kinds of organizations continued until earlier this month, when the agency’s new chief, Danny Werfel, says he discovered it and ordered it halted.

Full Article: Documents show IRS also screened liberal groups - Taxes - Boston.com.

Editorials: The real IRS scandal | Herman Schwartz/The Great Debate (Reuters)

We just had five congressional hearings about the Internal Revenue Service, full of sound and fury, but, we now know, signifying nothing. Despite all the hoopla and headlines about IRS personnel targeting conservative tax-exempt organizations, there is no real scandal here. IRS staffers acted not only legally but, given their impossible task, quite rationally. They forgot, however, that they not only work in a political fishbowl, they swim in a sea of politics. Faced with internally contradictory regulations laid out in vague terms, and with little guidance from higher-ups, they botched it. Republicans may now finally get the chance to pour unlimited amounts of secret money into elections. The Internal Revenue Code provides a tax exemption under section 501(c)(4) for nonprofit groups “operated exclusively for the promotion of social welfare” (emphasis added). In classic oxymoronic bureaucratic doublespeak, however, a 1959 regulation decided “exclusively” really meant “primarily.” Though the courts have ruled that a tax-exempt group’s political activity must be “insubstantial,” lawyers have argued this means it can be as much as 49 percent – and the IRS has gone along. Even that has been flagrantly violated by both Democratic and Republican 501(c)(4)s.

Full Article: The real IRS scandal | The Great Debate.

National: Political Optics Overlooked in ‘Tea Party’ Review – IRS Official | New York Times

Internal Revenue Service employees in Ohio, who singled out conservative groups applying for tax-exempt status for extra scrutiny, likely did not consider the political implications, an IRS official in Washington has told congressional investigators. Providing additional details about the worst crisis to hit the IRS in years, tax agency official Holly Paz told investigators she was concerned when she learned that IRS employees were singling out groups with “Tea Party” and other key words in their names. Paz is the most senior IRS official to be extensively interviewed by investigators. Ousted acting IRS Commissioner Steve Miller was among the top-level Washington officials grilled by Congress in recent weeks. Investigators conducted longer transcribed interviews with IRS employees behind closed doors. 

Full Article: Political Optics Overlooked in 'Tea Party' Review - IRS Official - NYTimes.com.