This story begins several years ago when we first learned that the IRS — under the current administration — had wrongfully targeted nonprofit groups. According to a Treasury Department report, the agency subjected hundreds of organizations to “inappropriate” levels of scrutiny as they sought to obtain tax-exempt status.
Of course, we could go back further still and review the numerous instances over the last several decades that both Republican and Democratic administrations alike have used the IRS as a political tool to attack their opposition, but perhaps that trip down memory lane is best saved for another time.
As a result of this most recent scandal, the IRS has been under increased pressure from both Congress and the American public to “do something” to prevent this sort of thing from happening again. Unfortunately, like so many other times we have asked our government to “do something” to solve a problem, the cure, in this case, is actually worse than the disease.
Rather than reversing its course, the IRS doubled down: In 2013, the agency announced plans to implement a new rule that would redefine “electioneering,” making it virtually impossible for nonprofits to exercise their free-speech rights. In other words, instead of just targeting conservative “tea party” groups, the IRS decided to extend their abuse to all nonprofits.
Previously protected speech, such as news reporting and issue advocacy, is now off limits to nonprofit groups once this “muzzle rule” takes effect. In fact, the mere mention of a political candidate or his voting record will be enough to get an organization stripped of its nonprofit status. While Congress intervened in November 2015 to defund the rule and prevent it from moving forward, those protections are set to expire on October 1 of this year.
In textbook bad-news-masked-as-good-news fashion, Congress is now attempting to extend the prohibition on the rule’s implementation for another year in the Omnibus Appropriations bill. However, as the Tax Revolution Institute (TRI) has previously reported, Congress could simply move to strike down the rule indefinitely, as it should, rather than kick the can down the road once again. But that wouldn’t be Congress’s style.
No, Congress, as usual, seems to be more concerned with appearances than actually getting down to the business of protecting civil liberties. A perfect example is the House’s recent passage of H.R. 5053, deviously titled the “Stop IRS Abuse and Protect Free Speech Act.”
While the title may sound nice, the bill, in reality, “does little to prevent IRS abuse, and even less to protect free speech,” according to TRI Senior Advisor Jeff Lewis.
“House Republicans have thus far served up only smoke and mirrors do-nothing legislation, peppered with faux righteous indignation,” he says. “House Democrat leaders claim the Republicans are trying to prevent the IRS from doing its job. Like the Treasury, they appear to desire doubling down on the abuse.”
The bill is essentially aimed at disallowing the IRS from collecting the names or other personally identifying information of donors from nonprofit groups. While the idea may be good in theory, the bill fails to address the root of the problem: why is the IRS in the business of determining what is or is not free speech?
The larger issue is apparently lost on the Congress, including Xavier Becerra, chairman of the House Democrat Caucus. In a June 8 letter to the House Appropriations Committee leadership, Becerra said that the “Congress should not use an appropriations measure to impede the IRS’s legal authority to improve upon this area of the law.”
It seems Becerra is perfectly comfortable with the idea of the IRS defining speech, and with Congress abdicating its duty to “improve” poorly written laws. It’s no surprise really, given the current political climate in which large individual donors and political action committees (PACs) are geared toward completely overtaking the voices of grassroot-activist groups, especially once the grassroots have been effectively silenced by the IRS.
Becerra must know which way the wind is currently blowing since he’s no stranger to PAC money himself. In fact, according to OpenSecrets.org, the House Democrat Caucus chairman has received over 63 percent of his campaign funds from PACs over his political career.
And he’s certainly not alone. According to Lewis, a “review of campaign donations to the leadership in both parties in the House suggests that PAC money is attempting to stomp out grassroots issue advocacy and reporting of incumbent voting records, especially around election time.”
The move to silence nonprofits, and to allow the IRS to govern free speech, without a doubt benefits incumbents like Becerra, and his financiers in political action committees, who are not governed by 501(c) law. Without nonprofits engaged in political speech, who is left to keep the citizenry informed of the issues?
The authority to define rules and regulations regarding voting and elections resides with the Federal Elections Commission as expressed in the Federal Election Campaign Act. The IRS’s encroachment into this area is an egregious overstep of its authority, and Congress must do more than the window dressing it is currently proposing.
Whether or not Republicans and Democrats will actually step up to do what is right remains to be seen, but recent history suggests that they will not do so willingly. The public must hold their elected officials’ feet to the fire, and the Tax Revolution Institute will continue to monitor this issue closely.
Let us know what you think in the comments below.