Politics

Obama Administration Proposes Rule That Would Rein in Political Activity of Nonprofits

[The Washington Post]

In this Wednesday, Oct. 16, 2013, file photo, the U.S Treasury Building stands in Washington. The Obama administration, on Tuesday, Nov. 26, 2013, launched a bid to rein in the use of tax-exempt groups for political campaigning. The effort is an attempt to reduce the role of loosely regulated big-money political outfits like GOP political guru Karl Rove's Crossroads GPS and the pro-Obama Priorities USA. The Internal Revenue Service and the Treasury Department said they want to prohibit such groups from using "candidate-related political activity" like running ads, registering voters or distributing campaign literature as activities that qualify them to be tax-exempt "social welfare" organizations. (AP Photo/J. David Ake, File)
In this Wednesday, Oct. 16, 2013, file photo, the U.S Treasury Building stands in Washington. The Obama administration, on Tuesday, Nov. 26, 2013, launched a bid to rein in the use of tax-exempt groups for political campaigning. The effort is an attempt to reduce the role of loosely regulated big-money political outfits like GOP political guru Karl Rove’s Crossroads GPS and the pro-Obama Priorities USA. The Internal Revenue Service and the Treasury Department said they want to prohibit such groups from using “candidate-related political activity” like running ads, registering voters or distributing campaign literature as activities that qualify them to be tax-exempt “social welfare” organizations. (AP Photo/J. David Ake, File)

The Obama administration moved Tuesday to limit the expansive role that nonprofit groups play in politics, proposing a regulation that would rein in ­certain tax-exempt organizations that have been able to spend hundreds of millions of dollars in recent elections without revealing their donors.

Under the proposed rule, groups such as Crossroads GPS, co-founded by GOP strategist Karl Rove, and the Democratic-allied League of Conservation Voters would no longer be able to claim some of their routine activities as part of their work as “social welfare” organizations.

Instead, the new Treasury Department regulation would define things such as distributing voter guides, registering people to vote and running ads that mention elected officials close to Election Day as “candidate-related political activities.” The rule would substantially roll back the level of political activity open to “social welfare” groups.

Once enacted, the new restrictions would represent a major shift for such organizations, set up under Section 501(c)(4) of the federal tax code, which have great latitude to engage in elections — a freedom they have increasingly exercised in recent years.

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