Archive for the ‘Campaign Finance’ Category

The Permanent Subcommittee on Investigations has weighed in on the progress the Internal Revenue Service (IRS) has made after last years’ “scandal,” and the majority is advocating bright line rules for political activity for nonprofits.

Committee members criticized the current facts and circumstances test and called for its replacement, lending their voice to the many nonprofits and citizens that have been calling for a bright-line definition of political activity applicable to all nonprofits. Such a rule would make it easier for nonprofits to engage in our democracy without fear of jeopardizing their nonprofit status.

“The facts and circumstances test used by the IRS was criticized as difficult to administer by every IRS official interviewed,” says the report.  It goes on to say that the test “produced subjective and inconsistent decisions on applications.”

The minority staff filed a separate report, and did not discuss the facts and circumstances test or provide recommendations for the future. The full report is available here.

The IRS is currently engaged in a rulemaking that could provide the sort of easily administered definition the report – and Public Citizen’s Bright Lines Project – calls for. A new draft of the rules is expected early next year.

Emily Peterson-Cassin is the Bright Lines Project Coordinator for Public Citizen’s Congress Watch division

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The US Chamber of Commerce just published another blog post slamming an Internal Revenue Service (IRS) rulemaking that could clarify the rules for nonprofits and reduce the influence of undisclosed political spending (like the more than $35 million the Chamber spent in 2012). The Chamber points out that vague rules are bad rules, and that the IRS’s first draft of proposed rules was deeply flawed. We agree!

The IRS also agreed that the proposed rules needed revision — that’s why the IRS is revising the rules and planning to reissue a new draft in early 2015.

The Chamber piece points out that unclear rules can have a chilling effect on democratic participation, which is precisely why tax law experts formed the Bright Lines Project five years ago (full disclosure, now housed at Public Citizen). The current rules that define political activity for nonprofits are based on the vague notion that IRS agents will be able to evaluate all the “facts and circumstances” surrounding each case to determine if something is political or not. Better would be bright-line definition for political activity to ensure that nonprofits know what they can and can’t do when it comes to political activity.

We agree with the Chamber that the first draft of the rules didn’t quite get there, and would have prevented nonprofits from participating in our democracy in ways that should be encouraged (like hosting debates and holding get-out-the-vote drives). So we’re glad to see the IRS taking another crack at fixing this important problem with the existing system.

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by Burkely Hermann

Recently, Every Voice came out with a new poll on money in politics, showing how American voters spanning political spectrum in twelve battleground states reject the idea the huge amount of money spent in the political system is “business as usual.”

The poll shows intense dislike of money interfering with elections. The poll shows that while more than 62 percent of voters support plans to reform campaign finance to empower small donors, super PACs are seen negatively. Additionally, 65 percent of voters feel that spending lots of money on elections “is wrong and leads to our elected officials representing the views of the wealthy.”

The results of this poll should be no surprise. After all, Americans have expressed a desire to reform the campaign finance system in the past. For example, in a 2011 Washington-ABC News poll, 69 percent of American voters said that they would like super PACs to be illegal and in a June 2013 Gallup poll, 79 percent of Americans said they would support “limiting the amount of money that U.S. House and Senate candidates can raise and spend for their campaigns.”

A Rasmussen poll shows that a majority of Americans believe that “elections are rigged in favor of incumbents.”

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For more than a decade, the U.S. Chamber of Commerce has been known for its sizable lobbying expenditures, but now it’s embarking on what CNN is calling “the most aggressive political cycle in its 102-year history.”

The world’s largest business association reported spending $35 million on behalf of candidates in 2012, likely spending $50 million total, including unreported expenditures. So far, during the 2014 election cycle, the Chamber has spent about $17 million on U.S. Senate and U.S. House races, getting involved early, in primaries, to an extent it hasn’t done previously. It’s promising to spend at least $50 million once again in this cycle. Given that the Chamber’s membership is secret, these tens of millions come from corporate sources that are mostly unknown – though we do know that most of the Chamber’s donors are large.

Unlike its more moderate incarnations in decades past, the Chamber now strongly favors conservatives. As CNN notes, the Chamber this cycle has endorsed 258 Republican candidates and just two Democratic candidates, though it says more of the latter are on the way. Six years ago, it endorsed 38 Democrats.

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by Emily Peterson-Cassin

As the Senate Rules Committee meets today to discuss transparency in elections, there’s a valuable asset in the fight against secret money that won’t be on the agenda: an IRS rulemaking that could change the definition for political activity by nonprofits and put a speed limit on dark money spending.

Nonprofits registered under tax code sections 501(c)(4) and 501(c)(6) have been spending millions attempting to sway voters, particularly after the Supreme Court’s devastating decision in Citizens United that allowed corporations to spend unlimited money to influence elections. These political operatives avoid disclosing their donors, and their influence is growing. According to the Center for Responsive Politics, three times more dark money spending has taken place in 2014 than at this point during 2012. This is notable since 2012 was a presidential campaign year and political spending is generally lower in midterm election years.

The IRS’s current, vague standard for what counts as political activity is like a traffic sign that says “go whatever speed you want.”

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