Tea Party Under Attack from New IRS Rules

January 21, 2014 8:56 am  

‘All they did was shift tactics’

(Tea Party) – Despite the illustrious targeting scandal, the IRS continues its attack on the Tea Party and other conservative groups with a new approach that may be difficult, if not impossible, to stop.

The president has said repeatedly that he will bypass Congress to achieve his goals.  “I’m going to act on my own if Congress is deadlocked. I’ve got a pen, to take executive action where Congress won’t, and I’ve got a telephone to rally folks around the country on this mission.”

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The effort to fundamentally transform our political system has barely been so much as a mention in the mainstream media but it is alarming conservatives due to its potential impact on our election process and on free speech—and because they are almost powerless to stop it.

In the last few days of November 2013, the IRS silently proposed new regulations that conservatives say would dramatically change the way elections are managed and severely restrict the political activity of grass roots organizations like the tea party by redefining tax-exempt political activity.

Under the proposal, the rules would change for 501 (c) (4) organizations—tax-exempt political organizations. These organizations are often engaged in educating citizens and carrying out grassroots lobbying.

Since many of the 501 (c) (4) organizations are those like the tea party, prominent conservatives are viewing the proposed rules as just another way to shut down groups such as the Tea Party Patriots and the American Family Association.

If the new rules are put in place, certain political activities would no longer be tax-exempt and would instead be redefined as “candidate-related political activity.”

Washington, DC Attorney Cleta Mitchell represents a number of the tea party groups targeted by the IRS. Mitchells says that under the rules candidate-related activities would cover just about everything a 501 (c) (4) typically does, including candidate debates, guides for voting, lobbying at the grassroots, issue advocacy as well as any public statements by officers of 501(c)(4)s that reference incumbents and candidates.

Even more disconcerting is the rule that says any event in which a candidate running for office appears, within 30 days of the primary or 60 days of a general election, is deemed a “candidate-related political activity” without question.

Meetings with public officials would be considered taxable events even if the appearance is made in an official capacity and not as a candidate.

According to Mitchell, the 501 (c) (4) organizations would be left with little they could actually do since virtually everything would be defined as candidate-related.

What’s worse, says Mitchell is that such a ruling would force citizens to get their candidate information from television ads and the media instead of from candidate debates and forums and town hall meetings, for example.

“It’s going to affect our ability to have free speech and hold members of Congress accountable,” said Steve Eichler, CEO of TeaParty.org.

“Speaking as one who’s been targeted by the IRS,” Eichler sees the regulations as severely hindering his group’s ability to coordinate with one another, to determine what Congress is doing, and decide when they need to hold Congress accountable.

“It costs money to get a big group of people together to research bills and find out what Congress is doing and then get the information out to people,” emphasized Eichler.

Confusion over the 501 (c) (4) designation may arise as well since they are called “social welfare organizations” by the IRS. Under such a moniker, images of things like the neighborhood watch and volunteer fire departments are conjured up.

Nearly two years ago, in March 2012, 7 Democrats including Sens. Chuck Schumer, NY and Al Franken, MN demanded that the IRS target conservative groups and tighten up restrictions on 501 (c) (4)s, specifically those associated with the tea parties. They claimed that such groups were “masquerading as social welfare organizations.”

A few months later Lois Lerner, IRS Director of the Exempt Organizations Division announced that the IRS would “consider proposed changes” in regulations that govern 501 (c) (4) tax-exempt status due to complaints that those “social welfare” groups were being used too much for political purposes.

In May of 2013 Lois Lerner apologized for inappropriately targeting conservative groups including the tea parties over a period of years. She then invoked her Fifth Amendment right rather than provide an explanation to Congress.

It is important to note that the IRS regulation on “501 (c) (4) – Civic Leagues and Social Welfare Organizations” states the following:

“If you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office.”

In addition, the legalzoom website states: “501(c)(4) organizations are allowed to engage in political activities in ways that other tax-exempt organizations are not. For example, a 501(c)(4) may spend as much money as it wants on lobbying activities. It may also endorse or oppose any political candidates of its choosing, and participate in campaigns by offering money, time or the use of its facilities.”

It was only after the tea parties become a force to be reckoned with in the 2010 midterm elections which turned the House back to Republican control that the Democrats objected to the use of 501 (c) (4) for politics.

Those on the left have used 501 (c) (4) organizations during campaigns to provide as advocacy for a long time.  Both NAACP and Moveon.org are 501 (c) (4)s.

David French, senior counsel at the American Center for Law and Justice (ACLJ) says, “Conservatives have been playing catch-up.” ACLJ is suing the government on behalf of tea party groups targeted by the IRS.

Said French: “501(c)(4)s are only a threat to the Republic since conservatives have begun their own movement of utilizing every legal means available to influence issues the same way the left has for years.”

According to Patrick Vaughn, General Counsel at the American Family Association (AFA), groups on the left more often use a tax-exempt organization that is named after section 527 of the IRS tax code. That is what makes his think that the proposed new IRS regulations are targeting conservatives.

According to Vaughn, “huge money going to liberal causes” goes into 527 organizations, named after section 537 of the IRS tax cide. The huge money donations come from big money donors like George Soros and if the money comes from the grassroots it flows through the unions.

On the other hand, most dollars that come from the conservative side come from smaller sources such as business owners and families. Vaughn noted that the money traditionally flows into 501 (c) (4) organizations dedicated to community improvement.

“The government and the IRS know that, so they’re targeting the structure the conservatives use,” said Vaughn.

But Vaughn also believes there is something more to this—it is more than an attempt to change tax rules. He believes it is part of a “coup”—a way to shift more power to the president, away from the people, says the expert in Constitutional law.

“I think we are in the middle of a quiet coup.” Here we have the president telling Americans it is a “good thing” to bypass their elected representatives to serve his constituency, says Vaughn.

As Vaughn explained to news media WND, “The current administration does not respect the system. They want to fundamentally change it. They believe in power. They believe in whatever means are necessary to justify their ends. And that’s what they’re executing. I am serious about this.”

According to Vaughn’s analysis, the executive branch of government is attempting to implement The Disclose Act—a bill that was rejected by Congress in 2012. He believes that what is taking place is that the Obama administration is attempting to dictate through the IRS, an executive agency, a law that Congress rejected. By doing this, the administration is subverting the separation of powers.

Naturally one must ask: “Isn’t that unconstitutional?”

Vaughn warned: “You have to be careful here.” “Administrative agencies have to fill in gaps that are left by the law.” Those agencies do not have much latitude when it comes to figuring out how to implement the regulations.

In David French’s view, the threat to the separation of powers and constitutional liberties is “very grave” and he considers it an extreme overreach by a federal bureaucracy—one that is unaccountable to the voters.

Furthermore, French explained that the danger these regulations impose is “in the critical phase when most Americans start paying attention to issues, in the 30, 60 , or 90 days before an election, to muzzle dissenting voices.”

Democratic lawmakers are not the only ones to lay blame on for the IRS targeting of conservative groups, says French.

“The president himself began to publicly condemn 501(c)(4) citizens groups, casting aspersions on their funding sources, demanding transparency” and not long after that, “the IRS began to ask about funding sources and began to make demands far beyond its legal limits,” explained French.

He continued to explain that when the IRS was caught abusing conservative groups, “they apologized, but all they did was shift tactics, trying to suppress speech by regulations rather than through lawless administrative actions, from 2009 to the present.”

And now, lawmakers and citizens are practically powerless to stop the IRS from implementing the new proposed regulations. These new regulations would fundamentally change the election system and 501(c) (4)s. If there is a massive outcry from the public there is hope.

If you would like to comment the last day to make public comments on the proposed changes is February 27th. After that date, absolutely nothing stands in the way of the IRS adopting the proposed rules.

At that point only the courts could intervene, declaring the rules an unconstitutional violation of separation of powers.

Comments can be registered by concerned citizens with the IRS at the Federal eRulemaking Portal. Include citation: IRS REG-134417-13.

Citizens can follow Mitchell’s recommendation for claiming to the IRS that the rules are not acceptable for the following reasons. They would:

  • Prevent citizens from holding public officials accountable
  • Cause citizens to be silenced and eradicate the purpose of grassroots groups
  • Create a different set of rules and standards for various 501c groups—a charitable organization could engage in more activities than grassroots groups
  • Force citizens to obtain important candidate information from brief TV ads and the slanted media rather than from a more direct information flow that comes from candidate debates, forums and face-to-face townhall meetings
  • Treat virtually everything a grassroots organizations does as candidate-related activities
  • Require by force that in even-numbered years organizations remove legislative voting records from their websites
  • Turn legislative voting records into a taxable, non-primary purpose activity of a c4 organization
  • Force meetings with public officials to become events that are taxable, even when the official appears as an “official” and not as a candidate
  • Force internal membership communications to become taxable if a candidate or public official is mentioned or if a group has more than 500 members who will receive the communication
  • Proclaim selected activities to be ‘candidate-related’ political activities even if the candidate is not mentioned
  • Give labor unions, universities, social clubs, churches, veterans groups, business groups and others to have greater First Amendment rights than grassroots citizens organizations
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