Political Activity Restrictions: Resistance is Futile

You know how I feel about it.  Congress should stop tryna regulate politics in exempt organizations.  Nobody is being dragged by their donation to any left or right wing charity.  And to the argument that we shouldn’t be forced to subsidize somebody else’s politics?  Well, I indulge a good steak every now and again, but I am still forced to subsidize Vegan Outreach; that one is forced to subsidize the National Cattlemen’s Beef Association. NCBA ain’t raising house pets and it subsidizes Vegan Outreach.  I could be wrong though.

Here is a thought-provoking opinion piece from Forbes regarding House Republicans’ politically motivated but still potentially useful inquiry into exempt organization political activity and foreign source funding.  The advocate disagrees with me, thinking it possible to actually enforce political activity restrictions in 501(c)(3) and (4), even it they were constitutional:  

Congress should limit the tax exemption to public charities, with full donor disclosure. Or, at the very least, it should prohibit direct or indirect campaign activities by tax-exempts and strictly limit their advocacy role. Social welfare groups have an absolute First Amendment right to say what they want about politics. But they don’t have a right to a tax exemption to do it.

Direct or indirect campaign activities? Limit their advocacy role?  We have all of that, Bro.  Since at least 1954 when the Johnson Amendment birthed itself in the dark of night when wasn’t anybody paying attention.  It didn’t work then, it ain’t working now, and it won’t work later.  Its 2024, almost. By the way, some of you might know Forbes’ author, Howard Gleckman.  A noted journalist, tax wonk and  senior fellow at Tax Policy Center.  With Kingsfield’s disapproving gaze.  He’s a tax geek so I can call him Bro.

Here is more from his Forbes essay entitled “Could Congress Actually Crack Down On Tax Exempt Political Organizations?”

“House Ways and Means Committee Chairman Jason Smith (R-MO) and Oversight Subcommittee Chairman David Schweikert (R-AZ) announced they are looking into political abuses by non-profit organizations. The lawmakers said their initiative could lead to legislation aimed at stopping the use of tax-exempt dollars to fund explicitly political activities.  

Their effort creates a small glimmer of hope that Congress could clean up this growing scandal in a bipartisan way. For years, Senate Finance Committee Chair Ron Wyden (D-OR) has pushed for more curbs and transparency for these organizations. And in 2021, progressive senators Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-MA) urged the Treasury to require more disclosure of who gives to these groups, though the department has taken no action.

The good news: If Republicans are outraged by what they see as Democratic abuses and Democrats are offended by perceived GOP abuses, maybe there is a bipartisan opportunity to fix the system. The bad news:  Smith and Schweikert focus their concerns entirely on activities that benefit Democrats and ignore parallel efforts to assist Republican candidates. 

. . . 

At issue is the role that 501(c)(3) and 501(c)(4) non-profits play in politics. (c)(3)’s are not supposed to be involved in partisan politics at all. The rules for (c)(4) social welfare organizations are murkier. Regulations appear to prohibit their participation in electoral politics. But for decades the IRS has looked the other way as long as politics is not their “primary purpose,” though no one knows exactly what that means either. To see just how long the IRS has been struggling with the issue, read this paper from 1995.”

You know how I feel about it.  Let’s just stop resisting. 

darryll k. jones