White House threatens veto of House IRS bill

The White House threatened on Tuesday to veto a GOP proposal that would delay proposed rules that grew out of the IRS targeting controversy for a year.

In a statement, the White House said the bill – which the House is scheduled to vote on this week – would keep the Treasury Department and the IRS from cleaning up unclear rules that some Democrats have said contributed to the singling out of Tea Party groups.

“It could prevent the IRS from administering the tax code more effectively and from providing greater clarity to organizations seeking tax-exempt status,” the White House said in a statement of administration policy.

House Republicans are continuing to hammer away at the IRS this election year, with several measures related to the agency scheduled to hit the chamber floor this week.

Ways and Means Chairman Dave Camp (R-Mich.) is the sponsor of the delay bill, which he and other top Republicans say would stop proposed regulations that would institutionalize the targeting that the IRS apologized for last May.

Top Republicans have also called on the IRS commissioner, John Koskinen, to withdraw the rules, saying he could otherwise be seen as under President Obama’s thumb.

Koskinen has shown no inclination to do that, and he and the White House have noted that the rules – which have so far sparked more than 76,000 comments – are just the first step in the rulemaking process.

Under the proposed rules, groups with the 501(c)(4) tax exemption – those at the center of the targeting controversy – would not be able to count so-called “candidate-related political activity” toward their social welfare mission.

The rules would apply to groups across the ideological spectrum. Candidate-related political activity includes spots referencing a candidate or a political party within 60 days of a general election.

The Obama administration said that the proposals were meant to shore up a gap between the law – which says that those groups should exclusively focus on social welfare – and current regulations, which say that should be their primary purpose. The White House also noted that the inspector general that outlined the IRS’s treatment of Tea Party groups had recommended giving the regulations another look.

“The lack of clarity of these standards has resulted in confusion and difficulty administering the Code, as well as delays in the processing of applications for tax-exempt status,” the White House said Tuesday. “The Treasury Inspector General for Tax Administration and the National Taxpayer Advocate, among others, have recommended clarifying the current rules.”