I rise today in support of H.R. 3865, the “Stop Targeting of Political Beliefs by the IRS Act of 2014,” to stop the IRS and Treasury from restricting free speech activities of social welfare organizations that have been in place for over 50 years.
Last May, we learned that the IRS targeted conservative groups seeking tax-exempt status. For over nine months, Committee investigators have reviewed hundreds of thousands of internal IRS documents and interviewed IRS officials regarding the targeting. Our investigation is not yet over, and the Ways and Means Committee continues to wait for the IRS to turn over Lois Lerner’s emails. Despite the ongoing investigations both in Congress and by the Inspector General, last November, Treasury rushed forward with proposed new regulations to stifle 501(c)(4) groups, upending rules that have been in place for over a half century.
Under the proposed rule, social welfare organizations would face additional, unprecedented scrutiny for engaging in the most basic nonpartisan political activity, such as organizing a nonpartisan get-out-the-vote drive, registering voters, or hosting candidate forums in their neighborhood. If the Treasury Department and IRS have their way, these sorts of activities would jeopardize the tax-exempt status of social welfare organizations.
Making matters worse, the Administration is pushing the proposed rule based on a false premise. Treasury issued these rules under the premise of “considerable confusion” in the tax-exempt application process. However, the Committee’s investigation has found no evidence that confusion caused the IRS to systemically target conservative groups. In fact, we found evidence that IRS workers in Cincinnati flagged Tea Party cases for Washington, DC because of “media attention.” And, before Washington got involved, front-line IRS employees were already processing and approving Tea Party applications with no intrusive questionnaires or signs of confusion.
In addition to being based on a false premise, the proposed rule was drafted in secrecy and long before the Administration’s proclaimed need for clarity. Our investigation has discovered that Treasury and the IRS were working on these new rules behind closed doors for years – well before the targeting came to light. While the Administration claims that the proposed rule is a response to the Inspector General’s audit report, IRS employees told Committee staff in transcribed interviews that discussions about the rule started much earlier – in Spring 2011. Further, a June 2012 email between Treasury officials and then-IRS Director of Tax Exempt Organizations, Lois Lerner, shows that these potential regulations were being discussed “off-plan” – meaning that the plans for the regulations were to be discussed behind closed doors. This type of behavior raises serious questions about the integrity of the rule-making process and counsels for putting a hold on the draft rules.
The intent of the rules proposed by the Obama Administration is clear – to legalize the IRS’s inappropriate targeting of conservative groups. These proposed rules severely limit groups’ rights to engage in public debate by labeling activities such as candidate forums, get out the vote efforts, and voter registration as “political activity” for 501(c)(4) groups. However, 501(c)(3)s – which are not allowed to engage in any political activity – and labor unions are free to continue to engage in these activities without limitation.
It is clear that the American people are also concerned that these proposed rules would squash their First Amendment rights. Treasury has received over 94,000 comments on the rule so far, which is the most they have received on any rule ever. Given the American public’s significant interest in the proposed rules, it is imperative that Treasury put a hold on them until the investigations into the targeting are complete so all the facts are known, and the public has ample opportunity to be heard.
This legislation will ensure that Treasury does not rush this rule into effect this year, allows the ongoing investigations to issue findings on the targeting, helps us to stop the IRS’s targeting of taxpayers based on their personal beliefs, and is a commonsense step to preserve these groups’ ability to engage in public debate.
I urge my colleagues to join me in voting YES to this legislation.