Voters call for clarity: The IRS should listen

tax-newBy Bill Schambra and Lisa Gilbert

Nonprofit political activity is at a crossroads. Nonprofits have come under criticism from some on the left for spending too much dark money to influence politics, while some on the right critique the IRS for subjecting certain groups applying for nonprofit status to increased scrutiny based on their names.

In the face of this hyper-partisanship, the conservative Hudson Institute’s Bradley Center for Philanthropy & Civic Renewal and progressive public citizen are joining to discuss new ways to reform the IRS’ treatment of nonprofit political activity and to hear from a vital voice that has so far been silent – that of the voter.

A new bipartisan poll, released at an event co-hosted by the Hudson Institute and Public Citizen, shows that more than 8 out of 10 voters think it is important to have clear rules concerning political activities of nonprofit organizations.  This is in stark contrast to the rules as they stand, which are so vague and difficult to administer that they’ve been partially blamed for last year’s targeting scandal, in which in which some applications for nonprofit status were selected for more intensive review based on key words in their names.

The poll indicates that 80 percent of voters think that organizations taking advantage of unclear regulations is a problem, showing that they are rightly concerned with the consequences of the absence of clear rules. Among voters who had an opinion, a majority favored changing the way nonprofit activities are regulated to establish clearer and fairer rules for what counts as political activity.  Voters also overwhelmingly favored disclosure of political spending by nonprofits.

This poll comes out at an important time for the future of nonprofits.

In November 2013, the IRS proposed a new definition of political activity that would have applied to 501(c)(4) social welfare organizations. The proposed rule was criticized for its potential to restrict activities that nonprofits had traditionally been allowed to engage in – such as host candidate forums and conduct voter registration campaigns.  The IRS is currently revising those rules and will publish a new draft in early 2015.  We hope that the new draft will protect those valuable nonprofit activities.

The poll was conducted by Lake Research Partners, a Democratic polling firm, and Chesapeake Beach Consulting, a Republican polling firm. The firms conducted a live telephone survey of 800 likely voters between July 26 and July 29. The numbers of Democrats, Republicans and Independents polled reflected the proportions of projected likely national 2014 voters from each of those parties.

The poll results show that nonprofit political activity isn’t an issue that matters only to tax lawyers. The integrity of nonprofits must be protected so they can continue to fulfill their mission to serve the public.  Naturally, groups as diverse as ours do not agree on everything that the new rules from the IRS should include. However, we think the IRS should listen to conversations like those taking place between our groups, as well as to the resounding agreement among disparate members of the public, to inform their decisions on what the next draft of their rules should contain.

The impact of these regulations on our election system (and public trust in it) will be substantial. Now that the public’s voice is part of the conversation, we think these discussions will be even more valuable.

Bill Schambra is director of the Hudson Institute’s Bradley Center for Philanthropy & Civic Renewal. Lisa Gilbert is director of Public Citizen’s Congress Watch division.

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