House Republicans urge IRS to abandon tax-exempt rules

A trio of House Republicans is calling for the IRS to abandon its efforts to rewrite the rules governing the tax-exempt groups at the center of the agency’s targeting controversy.

The IRS announced last week that it would revise its proposed rule for 501(c)(4) groups, after receiving tens of thousands of negative public comments.

But Reps. Steve Scalise (La.), the chairman of the conservative Republicans Study Committee, Mark Meadows (N.C.) and Brad Wenstrup (Ohio) say that’s not enough, and that the IRS should instead focus on the backlog of tax-exempt applications.

The three congressmen called last week’s announcement “both welcome and troubling,” and said they worried that the IRS would merely find “a more creative way to harass taxpayers” if they merely revamped the proposed rule.

“The current, longstanding rules have worked to protect the rights of civic groups and their members for more than fifty years, and we urge you join us in protecting these groups from the politically motivated abuses of power many have already been subjected to from the IRS,” the lawmakers wrote to John Koskinen, the IRS commissioner.

The letter comes more than a year after Lois Lerner, the former IRS official at the center of the controversy, first acknowledged that the agency improperly scrutinized conservative groups.

In its statement last week, the IRS said that it would look to revise the 501(c)(4) rules before heading to public hearings on the regulations. Congressional aides have said they don’t expect the rules before the end of the year.

The first proposal to tighten the rules for 501(c)(4) groups, released in November 2013, said that those organizations couldn’t count candidate-related activity toward their social welfare mission. But groups on both sides of the aisle criticized the rules as too broad, and GOP lawmakers pushed to have them delayed.

Democrats and campaign finance reform advocates have said that the current rules do need to be updated, because of a discrepancy between the regulations and tax law. The law says that 501(c)(4) groups should exclusively work on social welfare issues, while IRS regulations say that should be the organizations’ primary purpose.

Treasury’s inspector general for tax administration, which outlined the improper scrutiny of Tea Party groups last May, also recommended that the IRS update the rules.