GOP so-called reform of IRS protects secret money

Last year, mass hysteria broke out in Congress over an IRS scandal that did not actually exist. The IRS did not single out conservative leaning organizations applying for tax-exempt 501(c)(4) status. In reality, federal tax officials were scrutinizing applications from across the political spectrum using “look-out lists” of political terms commonly associated with the left and the right.

Misguided as this effort was, the IRS was attempting to prevent groups with purely political intentions from improperly qualifying for the 501(c)(4) tax-exemption. Unprecedented numbers of applications for 501(c)(4) status flooded the agency following the Supreme Court’s Citizens United decision because like charities, 501(c)(4)s can keep their donors secret even if they funnel buckets of anonymous cash to Super PACs or smear candidates with their own malicious attack ads. In 2012, a record $1.28 billion was spent by outside groups seeking to influence voters, and though most it was spent by Super PACs that disclose donors to the Federal Elections Commission, more than a quarter billion dollars cannot be traced to any source.

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Manufactured as it was, we saw the IRS scandal as an opportunity to address the real and growing crisis of unaccountable spending in our elections. We wrote the Treasury Department and urged the adoption of new rules ensuring groups seeking 501(c)(4) status truly reflect the letter of the law, which requires they be “operated exclusively for the promotion of social welfare.”  Such rule changes are needed if we want to take the IRS out of the business of monitoring political campaigns.

Given the level of concern in Congress about political bias at the IRS, one would expect broad support for our efforts. Yet rather than support rule changes designed to maintain the integrity of 501(c)(4) social welfare groups, this week the Majority passed a bill that would do the opposite. The so-called Stop Targeting of Political Beliefs by the IRS Act (H.R. 3865) completely bars the Treasury Department from issuing, revising, or finalizing any regulation that would change the status quo for one year. Our GOP colleagues claim this legislation will stop the IRS from using a group’s political beliefs to evaluate 501(c)(4) applications. To the contrary, what this legislation really does is preserve 501(c)(4)s as a tool for special interests intent on influencing the outcome of the 2014 and 2016 elections.

The 501(c)(4) tax-exemption was not created so that individuals and corporations who do not want to reveal themselves to the American people can still spend millions of dollars telling them who to vote for. Yet this abuse of 501(c)(4) status is exactly what H.R. 3865 aims to protect. This legislation does nothing to get the IRS out of politics. It only thwarts an effort that Americans overwhelmingly support: getting secret money out of politics.

Deutch has represented South Florida congressional districts since 2010. He sits on the Ethics; the Foreign Affairs; and the Judiciary committees. Welch is Vermont's congressman-at-large, serving since 2006. He sits on the Energy and Commerce and the Oversight and Government committees.