Republicans say new proposed IRS rules attack conservatives

The IRS’ proposed changes to requirements for tax-exempt “social welfare” organizations, which would put new limits on their political activity, are the latest attempt by the federal agency to target conservative groups, Republican lawmakers said Tuesday.

The regulations, House Ways and Means Committee Chairman Dave Camp, R-Mich., said in a hearing, were “drafted in a manner, in my view, to shut down tea party groups.”

While the new rules were proposed in November, in the wake of revelations last year that the IRS unfairly scrutinized certain conservative and progressive groups, using certain key words. However, Camp said the regulations were in the works as far back as 2011, when the inappropriate targeting was taking place.

Rep. Charles Boustany, R-La., chairman of the Ways and Means’ oversight subpanel, similarly said that the new rules would “essentially codify the continued targeting of these very same groups” that were previously targeted.

IRS Commissioner John Koskinen, who took the helm of the embattled agency after being confirmed by the Senate in December, told the subpanel that the IRS is determined to “put to rest all of the issues surrounding applications for tax-exempt status.”

“Taxpayers need to be confident that they will be treated fairly, no matter what their background or their affiliations,” he said. “Public trust is the IRS’ most valuable asset.”

Currently, “social welfare” organizations, which fall under the 501(c)4 classification, are allowed to spend unlimited sums of money on politics as long as politics isn’t their main focus. These tax-exempt organizations are not required to disclose their donors -- so after the Citizens United Supreme Court case in 2010 cleared the way for corporations to spend unlimited amounts of money in politics, the number of applications for 501(c)4 status more than doubled.

The new rules would limit the “candidate-related political activity” that these groups can conduct, defining that activity to include certain communications that expressly advocate for a certain candidate, giving certain grants or donations, and other activities like voter registration drives.

Koskinen said the IRS has so far received more than 21,000 comments on the proposed regulations -- setting a new record for the number of comments any draft federal regulations have ever received.

Both Camp and Boustany criticized President Obama for remarking over the weekend that the IRS scandal from last year could be chalked up to “boneheaded decisions,” insisting there was “not even a smidgen of corruption.”

“This committee has actually investigated the matter, and found otherwise,” Boustany said.

In fact, the Ways and Means committee investigation into the IRS activity is ongoing, as are five other investigations into the agency. When Rep. Sandy Levin, D-Mich., the top Democrat on the Ways and Means Committee, said there was no evidence of political corruption, Boustany criticized him for drawing conclusions before the investigation is over.

Levin told the Republicans at the hearing, “It’s clear you’re trying to keep this issue alive for political purposes.”

Rep. Joe Crowley, D-N.Y., slammed Republicans for demanding more information from the IRS, even after receiving 500,000 pages of documents from the agency, holding 14 hearings on the issue and conducting 60 interviews with IRS personnel. He called it an “attempt to find a smoking gun that would link what has taken place... to the president.”

“They have a gun -- it’s a smoking gun, but it’s a cap gun,” Crowley said. “You get a great sound and an awful lot of smoke.”

Meanwhile, Koskinen expressed his concern about the IRS’ limited budget. The agency has been allocated $11.2 billion for the 2014 fiscal year, which is about $1 billion less than it received in 2010. The agency also has about 10,000 fewer employees than it did four years ago.

Koskinen noted that in 2013, 40 percent of people who called the IRS hotline were unable to get an IRS employee on the phone -- and he expects that same problem this year.

“I can guarantee you we would answer more calls if we had more people,” he said. “I can guarantee we would have more people if we had more funding... It’s important to understand what we’re not going to get because we’re not paying for it.”