More on Political Activity Referrals and Political Activity Regulations

As previously blogged, the GAO Report to Congress (the full report is here) on the IRS processes for political activity referrals found significant deficiencies with respect to the initial allegations that triggered an audit.  In some cases, no case files were found by the GAO.  These deficiencies “increase the risk that EO could select exempt organizations for examination in an unfair manner – for example, based on an organization’s religious, educational, political or other views.”  According to Bloomberg BNA, in the hearing before the Ways and Means Oversight Committee in which the GAO report was released, it was determined that for the past six years, “one person working alone at the IRS has been deciding which complaints about the political activities of exempt organizations should be followed up.”

Following the above-referenced hearing, IRS Commissioner John Koskinen reported to Bloomberg BNA that final regulations on political campaign activities by exempt organizations will not be in place prior to the 2016 presidential election (see proposed regulations here).  The regulations will likely not be effective until January 2017.  See prior blog posts on the proposed regulations and political activity regulations generally (April 16, 2014July 16, 2015).

Nicholas Mirkay