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IRS to rewrite rule on political activity by non-profits

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IRS CommissiounerThe Internal Revenue Service said Thursday it would start over on its controversial rule limiting the political activity of certain tax-exempt groups and propose a new rule that would take into account a backlash of opposition.

The announcement made official what IRS Commissioner John Koskinen told USA TODAY last month — that the IRS would put out a new proposal and seek more public comments before overturning a 57-year-old precedent allowing certain tax-exempt groups to engage in limited amounts of political activity.

Last November, the Treasury Department proposed rules that would redefine political activity for tax-exempt social welfare organizations, known under the tax code as 501(c)(4) groups. Those groups would be limited in sending out mailings, participating in get-out-the-vote efforts, or advocating for or against nominees to judicial seats or Cabinet posts.

The proposal came six months after the IRS admitted that it had improperly targeted conservative groups for added scrutiny before the 2012 election. The proposed rule provoked immediate backlash from the right — and even some on the left. The agency received more than 150,000 written comments, the most ever on a tax regulation.

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