Tags: Obama | 501c4 | nonprofit | tax

Obama Assaults Nonprofits — Again

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Monday, 02 Dec 2013 08:24 AM Current | Bio | Archive

The arrogance of the Obama administration knows no bounds. You would think after it was exposed that the IRS was wrongfully targeting conservative groups seeking nonprofit 501(c)(4) status, the president would avoid targeting applicants and groups again.

Well that is not the case.

The president and his party want to put a chill on the activities of 501(c)(4) nonprofit groups that engage in election cycle advocacy. The past successes of 501(c)(4) groups has brought on this scrutiny in advance of the 2014 midterm elections by the Obama administration.

Democrats have unions and Republicans have 501(c)(4) groups they rely on for messaging before and during election cycles. The rules governing them though are as different as night and day.

The Obama administration is not advancing curbs on unions but is on nonprofit advocacy groups.

Charlie Spies, a nationally respected election attorney with the Clark Hill law firm, just this past week sounded the alarm with regard to what could be in store for 501c4 groups if Obama has his way. Here is some of what he warns:

"On Tuesday, Nov. 26, 2013, the Obama Administration issued proposed guidance intended to restrain the political activities of 501(c)(4) social welfare organizations. The proposed rules are seen by many as push back against critics of the administration's handling of recent scandals at the Internal Revenue Service (IRS) concerning its targeting of conservative nonprofit groups.

"The proposals are the first steps in a long regulatory process, which will include a comment period, and do not impact the activities of 501(c)(4) organizations until a final rule is issued."

The proposed guidance, issued by the Treasury Department and the IRS, seeks to provide more definitive rules regarding the types of activities that may qualify as political activity by creating a new term — "candidate-related political activity."

Under the proposed regulations, such "candidate-related political activity" would not promote an organization's social welfare purpose, and as a result, the organization would be limited in the amount of time and money it could spend on such activities.

To that point, the guidance seeks public comment on what proportion of a 501(c)(4) organization's activities must promote social welfare. Currently, the regulations provide that engaging in "social welfare" activities must be an organization's primary purpose.

Many organizations interpret this to mean that more than 50 percent must be spent on their "social welfare" purpose and less than 50 percent on political campaign activities (i.e., a 51/49 ratio). The administration's proposed guidance does not suggest or recommend a particular percentage, but seeks comment on this issue.

Under the proposed guidance, so-called "candidate-related political activity," would encompass the following activities:

Communications/Advertising
  • Communications that contain express advocacy
  • Communications made within 30 days of a primary election or 60 days of a general election and that clearly identify a candidate or political party
  • Communication expenditures that must be reported to the Federal Election Commission.

Grants and Contributions
  • Any contribution that must be reported under federal, state, or local campaign finance laws
  • Grants to 527 political organizations or to other tax-exempt organizations that conduct "candidate-related political activity"

Other Election-Related Activities
  • Voter registration and "get-out-the-vote" drives
  • Distribution of materials prepared by or on behalf of candidates or 527 political organizations
  • Preparation and distribution of voter guides that refer to candidates, or in a general election, to political parties
  • Holding an event within 30 days of a primary election or 60 days of a general election at which a candidate appears as part of a program.

Under the proposed guidelines, these "candidate-related political activities" would be considered to not support a 501(c)(4) organization's primary purpose, and the amount of time and money that an organization could spend on these activities would be limited.

As stated above, these are only proposed guidelines. The IRS must provide a notice and public comment period prior to adopting any final guidelines or regulations.

I will continue to provide updates as the process moves forward. In the meantime, 501(c)(4) organizations should seek experienced political law counsel prior to conducting any activities that the IRS may deem to be political.

This is a brazen attempt to silence the right since the same rules would not apply to the hundreds of millions of dollars unions will get to continue to spend in support of the left — before, during and after elections.

The president’s modus operandi is simple — he will do as he pleases and if we don’t like it, it will be up to everyone else to take legal action.  And we do. And we will.

Bradley A. Blakeman served as deputy assistant to President George W. Bush from 2001-04. He is currently a professor of politics and public policy at Georgetown University and a frequent contributor to Fox News Opinion. Read more reports from Bradley Blakeman — Click Here Now.

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Monday, 02 Dec 2013 08:24 AM
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