Halting Regulation Changes in the IRS (H.R. 3865)
Do you support or oppose this bill?
What is H.R. 3865?
(Updated July 13, 2017)
This bill would prevent the Internal Revenue Service (IRS) from changing the standard that organizations seeking tax-exempt status must meet.
The IRS and Department of the Treasury would be prohibited from issuing, revising, or finalizing proposed regulations that apply to groups applying for tax-exempt status.
This legislation would be terminated one year after its enactment, lifting these restrictions on the IRS.
Argument in favor
The IRS can’t be trusted in the wake of the targeting scandal, and allowing it to create new regulations while the investigation is ongoing would be irresponsible.
Argument opposed
Allowing this bill to pass would prevent the IRS from clarifying its review process for tax-exempt groups, allowing the confusion that created the targeting scandal to persist.
Impact
Organizations applying for tax-exempt status, national elections, and the IRS.
Cost of H.R. 3865
The CBO estimated that this bill would have little to no impact on IRS administrative costs, and the Joint Committee on Taxation estimated that enacting the bill would have a negligible impact on revenues.
Additional Info
Of Note:
The IRS targeting scandal — first given media attention in February 2012 and escalated into a full-blown controversy in May 2013 — had its roots in the Citizens United v. Federal Elections Commission Supreme Court ruling of 2010.
In that case, the Supreme Court ruled that political spending by nonprofit groups was protected political speech under the First Amendment, and as such cannot be restricted.
While Citizens United did not allow corporations, unions, and trade associations to make unlimited campaign contributions, it does allow unlimited contributions by those groups to 501(c)(4) organizations. 501(c)(4)s and “Super PACs” can receive and spend unlimited amounts of money but are restricted from coordinating their activities with candidates.After it was revealed that the IRS had targeted conservative tax-exempt groups for additional scrutiny, the ensuing investigation discovered that the IRS had been developing new 501(c)(4) regulations “off-plan.” This meant that these meetings were conducted in secret rather than being listed on the public schedule.
Meanwhile the IRS investigation has continued, with some now calling for a special prosecutor to be appointed. The active investigation coupled with the proposed regulations has touched off another round of controversy.Proponents of this bill point out that it would be premature and irresponsible for the IRS to be issuing new regulations on this subject while there is an ongoing investigation. Those opposed point out they are designed to clarify the confusion surrounding approved activities by tax-exempt groups. For their part, the Obama administration has threatened to veto this legislation in the event Congress approves it.
Media:
Sponsoring Rep. Dave Camp (R-MI) Press Release
House Ways & Means Committee Statement (In Favor)
(Photo Credit: swanksalot)
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