IRS: 'Slim' Chance of Muzzling Tax-Exempt Groups Before End of 2014

Susan Jones | April 9, 2014 | 8:15am EDT
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IRS Commissioner John Koskinen (AP File Photo)

( - Senate Republicans are pressing the IRS not to impose strict new rules on tax-exempt groups before the November election, or before Congress has finished its various investigations into the IRS targeting of conservative groups.

But on Tuesday, IRS Commissioner John Koskinen would only say that a proposed regulation limiting the advocacy and educational activities of tax-exempt groups probably won't be finalized until the end of the year.

"The chances of our finishing any regulation before the end of the year are very slim if not non-existent," Koskinen said.

I think that, unless the investigations are going to go on into next year, somebody will issue at least one (report) -- and hopefully this committee, perhaps others, will issue their report some time in the next 3 or 4 months, which will be well in advance of any time that we would have a chance of completing this regulation."

"With regard to the commitment is, that any regulation that is ultimately issued should be fair to everybody. It should be clear, and it should be easy to administer."

Koskinen said the IRS will "carefully review" all 150,000-plus comments that have been made on the proposed regulation.

"And as I've said, by the time we hold a public hearing -- in all likelihood, re-propose any regulation that we were considering and get more public comments -- it's going to be well into the end of this year."

On Nov. 29, 2013, the Treasury Department issued a proposed IRS rule that would broadly define prohibited 501(c)(4) political activity to include voter registration, voter education, communications that mention a candidate or party, grants to advocacy groups, and events in which a candidate participates. Even non-partisan activities would be limited, Republicans say.

Sen. Pat Roberts asked Koskinen if he was unequivocally committing to the committee that the 501(c)(4) regulations will not be finalized this year.

"I think what I have said is that the chances of it being finalized before the end of the year, not before the election, before the end of the year are slim. We are not rushing to get them done --"

"That expression," Roberts interrupted. "You know, the chances of something happening in Dodge City, Kansas, are slim and none, and Slim left town. So why don't we just say 'none this year,' and more especially, until the investigations are done. Why can't we do that?" Roberts asked.

"What I could easily commit to is we won't be anywhere near completing these regulations before somebody has completed an investigation," Koskinen said.

Roberts and 39 other Senate Republicans have introduced a bill that would protect the free-speech rights of (tax-exempt) 501(c)(4) organizations by prohibiting for one year the finalization of the proposed IRS regulation that would significantly limit the advocacy and educational activities of those groups.

The regulation specifically singles out 501(c)(4) organizations, and does not apply to other nonprofit organizations such as charities, labor unions or trade associations.

On May 14, 2013, the Treasury Department’s inspector general for tax administration released a report saying that the IRS had inappropriately applied excessive scrutiny to the applications of conservative groups applying for 501(c)(4) tax-exempt status.

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