The Obama administration moved Tuesday to limit political campaigning by political nonprofits that are classified as tax-exempt social welfare organizations.
The Treasury announced that it would propose new rules to specify which campaign-like activities groups organized under 501(c)4 of the Internal Revenue Code can and cannot engage in.
The changes would mean that groups could lose their tax-exempt status if they engage in an extended list of "candidate-related political activity," including ads that clearly advocate a certain candidate or occur within 60 days of an election, grants to organizations that engage in campaign activities, "get-out the vote" initiatives or distribution of political ads or voter guides.
The new definition would have the effect of limiting the activities of 501(c)4 organizations, which have taken on added prominence in recent elections.
Assistant Treasury Secretary Mark Mazur said that the proposal, to be submitted for public comment later Tuesday, was a "first step" in clarifying "clear-cut definitions of political activity" for political nonprofits.
The Internal Revenue Service faced major controversy surrounding its treatment of such groups earlier in the year when it revealed that it had targeted organizations affiliated with the Tea Party for added scrutiny.
The Treasury said the new rules would reduce the need for such inquiries into the eligibility of organizations applying for tax-exempt status.
But Dave Camp, the Michigan Republican who chairs the House Ways and Means Committee, criticized the administration for proposing new rules while the FBI probes into the IRS scandal. "This smacks of the administration trying to shut down potential critics," said Camp, calling for Treasury to cooperate with Congress' inquiry into the IRS' targeting of conservatives.
The administration is also seeking comments on whether to establish a new rule for political nonprofits requiring that a certain proportion of their activities be directed toward promoting social welfare rather than political purposes.