The Obama administration on Tuesday issued guidance that could restrict election spending by tax-exempt groups by clarifying what consitutes as political activity for non-profits, according to the Wall Street Journal.
“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by tax-exempt social welfare organizations,” Treasury Assistant Secretary for Tax Policy Mark Mazur told the Journal. “We are committed to getting this right before issuing final guidance that may affect a broad group of organizations. It will take time to work through the regulatory process and carefully consider all public feedback as we strive to ensure that the standards for tax-exemption are clear and can be applied consistently.”
These organizations already cannot conduct political activity as their primary purpose, but it hasn’t been clear what counts as political spending. The guidance would create a new category, “candidate-related political activity,” which could not go toward fulfilling the group’s main purpose.
The proposal by the Treasury Department and the Internal Revenue Service still needs to go through the rule-making process, which could take more than a year, according to the Journal.
Non-profit groups spent millions during the 2012 elections, prompting critics to question how effectively the IRS regulates those entities.
