H.R. 3865: Stop Targeting of Political Beliefs by the IRS Act of 2014

H.R. 3865

Stop Targeting of Political Beliefs by the IRS Act of 2014

Sponsor
Rep. Dave Camp

Date
February 26, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, February 26, 2014, the House will consider H.R. 3865, the Stop Targeting of Political Beliefs by the IRS Act of 2014, under a rule.  H.R. 3865 was introduced on January 14, 2014 by Representative Dave Camp (R-MI), Chairman of the House Committee on Ways and Means, and has 66 cosponsors.  H.R. 3865 was ordered reported, in the nature of a substitute, on February 11, 2014 by a vote of 23-13.[1]

Bill Summary

H.R. 3865 prohibits for one year the Department of Treasury and the Internal Revenue Service (IRS) from finalizing their proposed 501(c)(4) regulations issued on November 29, 2013, keeping in place the regulations that were in effect on January 1, 2010.[1]

Background

Under regulations in place for over fifty years, an organization is eligible for a tax exemption under section 501(c)(4) of the Internal Revenue Code if it is primarily engaged in promoting social welfare.  These organizations may engage in some political campaign intervention as long as the activities remain secondary to their primary social welfare purpose.  Non-partisan get-out-the vote (GOTV) efforts, voter registration drives, and candidate forums near an election are not considered political campaign intervention under current law.[1]  However, under the proposed rules published in November 2013, GOTV, voter registration and candidate forums would be redefined as political campaign intervention for 501(c)(4) organizations; if they engage in these activities they could jeopardize their exempt status.  The proposed regulations are clearly directed at the Administration’s critics, the very same kind of groups that the IRS targeted in the period 2010-2012.  Treasury claims that confusion of about 501(c)(4) regulations at the IRS led to the targeting revealed in May 2013, thus the need for a rule change.  The Committee on Ways and Means investigation has revealed that there was no confusion at the IRS and that these regulations have been under consideration since at least 2011.[2]



[1] This is true for 501(c)(3) charitable organizations and 501(c)(5) unions as well.

Cost

According to CBO, “implementing this legislation would have no significant impact on IRS administrative costs, which are subject to appropriation. The staff of the Joint Committee on Taxation estimates that enacting H.R. 3865 would result in a negligible loss of revenues over the 2014-2024 period, therefore, pay-as-you go procedures apply. JCT has determined that the bill contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act.”[1]

Additional Information

For questions or further information contact the GOP Conference at 5-5107.