Updated: Hatch, Kyl respond to Baucus non-profit letter to IRS

"We are worried that the sole purpose of any such effort is to chill the legitimate exercise of First Amendment rights and intimidate Americans who wish to be part of petitioning the government for redress of their grievances," the letter states, adding that the investigation must "strictly adhere to the long-established policy that no political influence be used to dictate selection of particular organizations for examination."

Baucus last week sent a letter to Shulman asking him to investigate 501(c)(4), (c)(5), and (c)(6) organizations involved in political activities. 

The request stemmed from reports that some non-profits were secretly backed by individuals advancing personal agendas, which tax-exempt organizations are largely prohibited from doing. 

"Political campaigns and powerful individuals should not be able to use tax-exempt organizations as political pawns to serve their own special interests," said the senator in prepared remarks. "The tax exemption given to non-profit organizations comes with a responsibility to serve the public interest and Congress has an obligation to exercise the vigorous oversight necessary to ensure they do."

The letter came on the heels of Senate Democratic leaders failing to advance the Disclose Act, a bill requiring major campaign donors to make their contributions public. It also sounded alarms bells for Hatch and Kyl, who feared the effort could infringe upon free speech. The lawmakers seek to ensure that the examinations will be above board.  

"We request confirmation that the IRS will adhere to the Office of Management and Budget (OMB) rules and regulations governing such surveys and that the IRS will obtain the necessary OMB approvals," the Hatch/Kyl letter states. "Furthermore, we request that the IRS develop a framework for conducting these surveys, and to report back to the Senate Finance Committee before proceeding with any survey so that the Committee can consider whether it believes that the survey is properly designed to obtain the type of information that will be of most use to the committee." 

The IRS must also provide to the committee the audit rates for the past ten years on the organizations being examined, as well as their tax details.

"Should the IRS choose to conduct the requested survey, we would ask the Treasury Inspector General for Tax Administration to monitor these efforts to ensure that political independence is maintained, and that the audit be conducted in a fair and comprehensive way," the senators wrote, adding, "We expect the IRS will adhere to those standards despite requests to the contrary from high level political officials."

Baucus spokesman Scott Mulhauser said the intent of the examinations is to ensure that these groups are following the law. 

"It's pretty simple, the tax code has specific requirements for campaign activities, which clearly include disclosure," he said. "The committee's concern is that many of these special interests are hijacking sections of the tax code to engage in election activities, but avoiding the disclosure required by law."

This post was updated at 8:51pm.