Silk purses can sometimes be made from sow's ears, but such an outcome will never happen with the proposed IRS nonprofit oversight rule that would put the federal tax agency in the role of regulating First Amendment freedom of speech and association. The rule was conceived as part of the Obama administration's illegal campaign using the IRS to target conservative, Tea Party and evangelical non-profit groups seeking tax exemption during the 2010 and 2012 elections. When the proposal became public, it generated an unprecedented flood of outraged criticism from groups and individuals from across the political and ideological spectrum.
The proposal was so poorly written that it united groups as diverse as the American Civil Liberties Union and Americans for Prosperity. The former warned that “we can say with confidence that bona fide charitable organizations, may also, under the proposed rule, be forced to seriously 'hedge and trim' what should be fully protected speech in their issue advocacy to stay far clear of any potential CRPA. Worse, this chilling effect will be more acute for smaller organizations that do not have access to legal expertise in this area.”
Speaking for the latter, Levi Russell said “because the proposed rules are so sweeping, categorical, and prohibitive, they will almost certainly affect organizations both large and small with equally draconian effects.” And the Center for Competitive Politics said “the proposal regulates far more speech than can be justified, under either administrative law or the First Amendment, given Supreme Court precedent over the past several decades."
Among the most damning of the 150,000+ comments received by the IRS were these from Gary Bass, a veteran of liberal non-profit activism and philanthropy: "Ultimately, the proposed Treasury-IRS rules would further chill nonprofit civic engagement and send a message to funders and groups that even long-standing and widely accepted nonpartisan behavior is 'political.' Such limitations are unacceptable in a democracy and raise troubling constitutional issues in their ambiguity and uneven treatment of charities, social welfare groups and other tax-exempt organizations."
Earlier this week, IRS Commissioner John Koskinen told USA Today that a revised version of the proposal will be prepared and submitted for public comments late this year. It appears the onslaught of broad-based criticism -- the most ever received by the IRS on a proposed regulation -- forced the Obama administration to delay resolving the issue until after the November election.
Even so, Koskinen and his agency have clearly learned nothing from the reaction because he told USA Today that "one of the questions that has evoked a lot of comment is, once you define what political activity is, to what organizations should it apply in the 501(c) context and how much of it should be allowed?”
Defining what is permissible political activity in America is not the job of the IRS or any other federal entity. Senate Minority Leader Mitch McConnell has it exactly right: “Leave the First Amendment alone. Get out of the censorship and harassment business. Stick to the job you’re actually supposed to be doing.”