The following are TCC's formal comment to the IRS on proposed new regulations that would discourage much of TCC's grass roots activity on legislation before Congress.
Comments submitted to the IRS
The draft regulations published by the IRS in the November 29, 2013 Federal Register raise significant First Amendment questions in their treatment of what they describe as “candidate-related political activity” by social welfare organizations. If approved in anything resembling their current form, they will guarantee years of litigation and are likely to be overturned in whole or in part by Federal courts.
The major argument made by the IRS is that looking at the facts of each individual case is too difficult and time-consuming. Therefore the IRS proposes to apply a simplistic definition which it freely admits will sweep in non-profit programs that are not candidate-related, but will be arbitrarily treated as if they are. Common sense, fairness, and the Constitution demand rules which are more fair and accurate.
The most indefensible aspect of the regulations is their admission that advocacy relating to the passage or defeat of legislation, during certain periods of time, will be treated as support or opposition to candidates no matter what the facts may be. In fact, this injustice will even apply to cases of general discussion of possible changes in the law.
It is easy to construct scenarios in which the effects of such regulations are seen as ridiculous.
1. Imagine that a newly-elected member of the House of Representatives, on the first day of Congress, introduces a bill. A social welfare organization, approving the content of the bill, puts a laudatory entry on its website describing the bill and mentioning the name of its sponsor. For twenty months that entry remains on the website, and is not considered “candidate-related”. Suddenly, in September of the next year, the organization must remove it because it has magically been transformed into an attempt to help elect the Representative to another term. The day after the election, the entry may go back up and is recognized as advocacy again.
2. Consider the plight of an organization that seeks to defeat legislation moving through Congress. The organization uses its website, email, direct mail, and contact with the news media to keep the public aware of the progress of the bill, and to urge time-appropriate grass roots action to prevent its passage. As the bill comes to the Senate floor in May, Senator X offers an amendment which, if adopted, would remove the bill’s offensive features. The organization naturally wishes to ask everyone to contact their own senators and express support for Senator X’s amendment. However, Senator X has a June primary, and using his name would automatically be considered “candidate-related” despite the organization’s long history of focusing on the legislation without any involvement in elections. In order to avoid negative consequences, they must somehow tell their supporters to back the amendment without once mentioning Senator X. Given that media reports will almost certainly refer to it as the “X amendment”, the organization finds itself unable to name the amendment in its most easily identifiable form.
The X amendment fails, and the bill eventually passes the Senate but languishes in a House committee. In late September the committee suddenly announces that it will take up the bill in just a few days. The organization wants to contact its supporters living in the districts of key committee members, warning them that they must immediately contact their representatives and urge a negative vote in committee. However, the most effective method of communication requires naming the representative, since it is not unusual for people to be uncertain of the name of their representative. Under no stretch of the imagination can this be considered “candidate-related political activity”. The organization did not choose a time close to the election; that decision was made by the committee chairman. Nor did the organization choose to target certain members who may be in a difficult race. The committee membership was chosen by the congressional leadership (of their own party) almost two years earlier.
3. A member of the House seeks passage of a Senate-approved bill whose fate in the House depends on members who will unquestionably come under great constituent pressure to vote against it. Various organizations are waiting for the bill to be taken up, prepared to contact their supporters in key districts. The bill’s sponsor waits for more than a year, until September of an election year, then quickly moves the bill from committee to the floor for a vote. The organizations find themselves faced with a dilemma, knowing that they will come under IRS scrutiny for “candidate-related political activity” if they call for grass roots pressure on the members who hold the bill’s fate in their hands.
4. A social welfare organization in California invites a member of Congress from Kentucky to speak at the organization’s Constitution Day event on September 17. The member has a reputation as an expert on the Constitution, having written books and articles on the topic. He has no major party opposition on the Kentucky ballot or any third-party or independent opposition with any chance of winning (which is why he is willing to spend time in California, instead of campaigning in Kentucky). In no way can this be considered as an attempt to reelect the Congressman, yet the regulations would require this to be counted as “candidate-related political activity”.
5. Social welfare organization A makes a donation to social welfare organization B, but only after obtaining a letter from organization B clearly stating that organization B does not carry out any “candidate –related” activity. Organization B holds a series of conferences on education reform, and invites Professor X, who has written extensively on the subject, to speak at its March conference. Unknown to organization B, Professor X is running unopposed for town council in May. Organization B is now unequivocally guilty of making a fraudulent representation in its letter to organization A, yet the facts clearly show that it had no intent of helping Professor X’s campaign, and inviting him had no effect on his chance of election.
Examples such as these show why the IRS should accept the necessity of examining the facts and circumstances of each case. The Constitution does not guarantee that government employees will have an easy job. It does guarantee freedom of speech, freedom of the press, and freedom of petition.
One possible alternative would be for the IRS to establish safe-harbor rules that would clearly protect most advocacy activity, and limit the number of cases which would require an examination of facts and circumstances. The safe harbor should protect organizations that have a history, prior to the period immediately before an election, of advocacy on an issue. It should exempt any communication which specifically calls for support or opposition to specific legislation or potential legislation which is being discussed by elected officials or the news media, even if not yet introduced. Inviting a candidate to speak outside the boundaries of his election district should be exempted. Communications aimed at a national audience, rather than narrowly targeted to a state or district, should never be considered “candidate-related” if the candidate mentioned is not running for a national office (i.e. president or vice president).
Given the grave threat posed by these regulations to First Amendment freedoms, the IRS should convene a formal hearing at which all concerns (only a few of which have been touched on here) are given a public forum.
ACL is a public policy organization, contributions to which are not tax deductible. The IRS has determined ACL to be a 501(c)(4) organization, exempt from Federal income tax. Contributions to ACL are not subject to FEC regulation or disclosure requirements, and corporate donations are permitted.