Sept. 30, 2014 SIGN IN | REGISTER

A Not-So-Bright 'Fix' for the IRS | Commentary

As Congress and the Department of Justice continue investigating the IRS scandal, there is growing recognition in Congress of the need to fix the laws or regulations that facilitated the agency’s targeting of ideological nonprofit groups. Recently, a panel of experts calling itself the Bright Lines Project presented a 32-page recipe for reform (“Finding Congressional Solutions to the IRS Scandal,” June 14). Despite its apparent good intentions, in practice, the proposal would insulate elected officials from public opinion and pressure. Members of Congress committed to the First Amendment should reject this guidance, which would make a bad situation worse.

As the name suggests, the Bright Lines Project purports to provide clear rules for the IRS to delineate the types of political activities that are restricted or off-limits for nonprofits. Currently, the agency relies on a nebulous “facts and circumstances” test for determining when a charity engages in prohibited “political intervention,” or when a social welfare group, union or trade association exceeds its limit on the same. When asked what constitutes “political intervention,” the IRS basically answers, “it depends on the facts and circumstances.” It’s easy to see how this could be a source of rampant abuse.

But the Bright Lines proposal not only perpetuates “facts and circumstances,” it makes it worse in many respects. For starters, the proposal calls for a “general speech rule” under which “any communication to any part of the electorate that (a) refers to a clearly identified candidate and (b) reflects a view on that candidate” is considered political intervention. “The view could be positive, negative, or nuanced.”

Despite its use of election-related vocabulary, the rule itself covers much more than election-related activity. To illustrate the proposal’s far-reaching effects, let’s use an example familiar to members of Congress: a newspaper ad urging them to enact gun legislation. If the ad names specific members, it could easily run afoul of the rule.

The proposal offers several “safe harbors” that purport to help groups preserve their tax-exempt status. However, like the project’s name, these “safe harbors” are a misnomer. They are more like throwing nonprofits into shark-infested regulatory waters with nothing more than a life vest, as none of the protections applies to “paid mass media advertising.” Thus, if the sponsor of the gun control ad discussed above is looking to grasp on to a “safe harbor,” it will find none under the Bright Lines proposal.

Even if a group were to forgo paid advertising, most of the proposed protections are still excessively narrow to the point of being nonexistent. For example, if our gun control group were to circulate a petition targeting specific members of Congress, the proposal appears to protect such activity under an exemption for influencing official action. But the exemption is limited to “specific actions the official may yet perform within his or her current term of office.” Advocacy targeted at legislative officials must be done while a “legislative vote or other major legislative activity” is pending.

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