WASHIGNTON, February 27, 2014 — On Tuesday night, True The Vote.org Executive Director Jennifer Rice conducted an online town hall / national conference call for supporters of open access to issue based organizing, particularly via the leveraging of the power of 501 (c) 4, Not For Profit groups.
The featured speakers were Catherine Engelbrecht, President of True The Vote, who testified earlier this month about her harrowing personal experiences with intrusive federal agencies, and True The Vote Executive Counsel, Cleta Mitchell, who has filed suit against the IRS, alleging “unlawful actions by the IRS in the processing of its application for exempt status.”
The issue at hand under discussion in the conference call was the disclosure of a new series of unilateral rules being proposed by the IRS, which have a significant potential to menace and chill the legitimate activities of non profits involved in such pursuits as promoting non-partisan fair election monitoring, educating voters and combating election fraud. To better understand the framework of this alarming development, look at the IRS code as it stands today. The IRS says in reference to 501 (c) 4 groups:
“To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements).
“Seeking legislation germane to the organization’s programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status. A section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. Other current provisions of this segment of IRS tax code prohibit 501 (c) 4’s from involvement in political campaigns on behalf of a candidate or political party.”
That the targeting of political enemies and potential enemies was a enterprise wide scheme in the Obama Administration prior to the outbreak of the scandal is not even subject to question. A flood of evidence has been uncovered, including a June 14, 2012 e-mail from Treasury official Ruth Madrigal to then IRS Commissioner Lois Lerner and others: “Don’t know who in your organizations is keeping tabs on c4s, but since we mentioned potentially addressing them (off -plan) in 2013, I’ve got my radar up and this seemed interesting.” “Off-plan” or “off-line” is a bureaucratic euphemism for a stealth agency manuever that is in secret and out of the public view, as explained by Congressman Dave Camp, R-Mich.
The matter of the IRS’s illegitimacy — a word that covers a lot of ground regarding all things Obama Administration — in targeting conservative non profits came into play during negotiations between Congress and the White House in the FY 2014 Omnibus Spending bill. The GOP sought agency reforms in the wake of the revelations of outrageous IRS behavior, principally between April 2010 and April 2012, predominantly targeting perceived conservative applicants for non-profit status.
Congressional and Senate Democrats — the likes of Al Franken and Chuck Schumer, the champions for the intrusive and abusive tactics of the agency — objected to any proposed remedies to the behavior. In fact they were so determined to protect the IRS’s capabilities as a partisan battering ram, that they forfeited such administration priorities in the spending bill as increases in funding for the International Monetary Fund, the president’s prekindergarten program and more ObamaCare dollars.
As Kimberly Strassel of the Wall Street Journal observes, “That’s a lot to sacrifice for a rule that the administration has barely noted in public, and that then-acting IRS Commissioner Danny Werfel claimed last fall when it was introduced is simply about providing ‘clarity’ to nonprofits. It only makes sense in a purely political context. The president’s approval ratings are in the toilet, the economy is in idle, the ObamaCare debate rages on, and the White House has a Senate majority to preserve. With one little IRS rule it can shut up hundreds of groups that pose a direct threat by restricting their ability to speak freely in an election season about spending or ObamaCare or jobs. And it gets away with it by positioning this new targeting as a fix for the first round.”
It seems obvious that a weaponized IRS is of infinitely more value to Democrats and the president than even the Trojan Horse that is the Affordable Care Act. Engelbrecht and Mitchell outlined a number of the looming provisions of the modified regulations:
- Customary activities of social welfare groups such as voter education, registration, issue organizing and non-partisan candidate forums would be re-classified as political and therefore non-exempt enterprises for taxation purposes.
- No more than 40 percent of activity could be political as compared to the present standard of no such precise formulas.
- Media statements that the agency could categorize as political, would invalidate a groups exempt status if made within a window of 30 days before a primary and 60 days before a general election.
- Voter Information guides simply outlining a candidate’s voting record on issues of concern to the members of the non-profit would be grounds for revocation of the group’s tax exemption.
- 501 (c) 4 non-profits would be required to resort to a burdensome and exhaustive accounting process designed to certify even minute details of a community action organization.
Additional proposed legislation would violate the privacy of members and donors in a manner that would have a chilling, crippling effect on the sustainability of the group.
It’s remarkable to note that Labor Unions like the AFL-CIO and SEIU, K-Street lobbyists like the United States Chamber of Commerce, and powerful foundations like the Rockefeller and Ford Foundations would emerge unscathed by these proposed changes. In the 2012 election cycle, according to the Center for Responsive Politics, unions gave $143 million to federal candidates, parties, and outside groups.
Diana Furchtgott-Roth, writing in Real Clear Markets, noted, “In a column written on Sunday, November 4, 2012, the weekend before the presidential election, SEIU president Mary Kay Henry wrote ‘On Saturday, more than twenty-five thousand SEIU members were out in full force, knocking doors and making the case for President Obama and other champions for working people. Collectively, SEIU members have knocked almost 460,000 doors in Ohio, having conversations with close to 7,000 members along the way.’ This is undoubtedly public communication, posted on the Internet, made within four days of the election. Yet the IRS is not targeting 501(c)(5) organizations such as the SEIU.”
Apparently equal access is not something this administration or Democrats tolerate. If such a plan is allowed to proceed, it will encode the harassment uncovered in the IRS targeting scandal investigation, where a biased and exhaustive vetting process was selectively applied in the vast majority of the cases Congress has reviewed. It’s seems ironic that a 501 (c) 4 group as patently and single mindedly committed to supporting the interests of President Obama, as is Organizing For Action, has escaped IRS scrutiny or sanction.
The possibilities that a succeeding administration every bit as Machiavellian as the current White House, but with a different list of political enemies might have access to a weaponized IRS, have not escaped the imagination of even left-leaning political organizations such as the Sierra Club and AARP, who among others have filed their strong objections. Even Nan Aron, President of the Alliance For Justice stated that the result of the proposed rule changes “would be the weakening of the ability of everyday Americans to band together with like-minded people to fight for what they believe. The only winners in that scenario are the wealthy and powerful who have no trouble being heard. The big loser would be democracy itself.”
Those who are concerned about the corrosion of civil liberties, no matter which side of the political spectrum, should be hearing alarm bells go off with this stealth proposal — a proposal published last year on Black Friday of all days so as to escape public scrutiny. This scheme, quite likely is unconstitutional on its face, violating the prerogative of Congress to manage changes in tax law. The Heritage Foundation interprets this process as a violation of legislative authority under various statutory provisions, most notably the Administrative Procedures Act.
As Catherine Engelbrecht stated in her comments Tuesday evening, “what is happening, is nothing short of a very covert attempt to forever silence a section of what we have always considered a non-profit landscape where there were organizations that could serve the public good, that could educate voters and engage citizens.”
Today, 11:59 p.m. Eastern Standard Time, is the deadline for citizens to voice their opinion directly to the IRS on this issue. If you are so inclined, go to www.regulations.gov and enter 134417-13, the number of the regulation and enter your comments. Examples of the type of comments that will trigger the requirement of the IRS to “address all references to specific provisions”, can be found at We Will Not Be Silenced.org.
Make it a February for the IRS and the White House to remember.