IRS to Unveil New Plans for Restricting Political Activity of Certain Nonprofits

The IRS is preparing to announce new guidelines next year for restricting the political activity allowed for certain tax-exempt advocacy groups.

Attorney General Eric Holder, left, listens as IRS Commissioner John Koskinen speaks during a news conference at the Justice Department, on Monday, May 19, 2014, in Washington. (AP Photo/ Evan Vucci)

The agency backed off a draft earlier this year after receiving an overwhelmingly negative response from organizations across the political spectrum who felt the proposal restricted political speech.

But more defined IRS rules help “people running 501(c)(4)s in terms of knowing what they can do and can’t do, what the rules are,” IRS Commissioner John Koskinen said in an interview with the Center for Public Integrity, in which he announced the rules would be unveiled in early 2015.

“We’d be much better off if we had clearer definitions and a clearer roadmap,” he said.

The new restrictions could include capping political activity of a 501(c)(4) group to a certain percentage of overall activities and extend rules to trade associations and labor unions. Koskinen said it would differ from the draft that the IRS backed away from.

“There are three issues: What should be the definition, to whom should it apply and how much … can you do before you jeopardize your exemption?” said Koskinen, who took office in December. “The next resolution will differ from the first draft because it will deal with all three questions.”

The Internal Revenue Code defines 501(c)(4) organizations as “social welfare” groups that “further the common good.” That includes voter education.

The Republican-controlled House passed legislation to keep the IRS from imposing new rules until after the investigation into the targeting of Tea Party groups has concluded, which was passed with the help of 14 Democrats.

Koskinen’s announcement comes in the midst of new skepticism over the IRS’ claim that emails from ex-IRS official Lois Lerner were lost in a hard drive crash.