Opposition Grows to Bill Delaying IRS Rulemaking on Nonprofits

Public Citizen's Bright Lines Project is urging House Ways and Means Committee members to oppose a bill that would delay new IRS rules for 501(c)(4) organizations.

The Bright Lines Project has been working for years to create clear, fair rules that would apply to all nonprofits and would encourage nonpartisan civic engagement while removing opportunities for abuse. The IRS' new rules seek to resolve the ambiguity of the current "facts and circumstances" test that allowed 501(c)(4)s, so-called "social welfare" groups, to spend millions of dollars on elections in 2012 without disclosing their donors.

But House Resolution 3865, sponsored by U.S. Rep. Dave Camp (R-Mich.), would prevent the IRS from finalizing the rules for one year.

"The IRS has rightfully moved to correct a standard that has been confusing nonprofits for decades, and we applaud it for taking the initiative to do so," said Lisa Gilbert, director of Public Citizen's Congress Watch division, which oversees the Bright Lines Project. "Changes in the proposed rules are necessary, but hindering the process will only exacerbate the uncertainty that nonprofit organizations on both sides of the aisle feel concerning the current vague rules."

Added Craig Holman, government affairs lobbyist for Public Citizen's Congress Watch division, "There is no justification for delaying the rulemaking. Doing so will only increase the opportunities for hundreds of millions of dollars of undisclosed 'dark money' to flow into federal elections due to abuses of the tax code."

Also today, Public Citizen and other reform groups describe the need for new regulations governing 501(c)(4)s in a letter (PDF) and are calling upon the committee not to hinder the rulemaking.

The comment period for the IRS' new proposed rulemaking closes on Feb. 27.