-By Paul Blumenthal
June 18, 2013- WASHINGTON — Rep. Chris Van Hollen (D-Md.) said Tuesday that he and two campaign finance watchdog groups would sue the IRS, challenging regulations that allow nonprofit groups to be involved in politics if they're "primarily" devoted to a social welfare purpose.
Van Hollen said he and watchdog groups Campaign Legal Center and Democracy 21 would sue to clarify an IRS regulation that he said was at odds with the law, which requires certain groups to "exclusively" engage in social welfare to earn nonprofit status. The IRS regulation permitting groups “primarily” engaged in social welfare allows the organizations to participate in an undefined amount of political activity, said the congressman, a leading advocate of campaign finance reform and ranking member of the House Budget Committee.
The 1959 IRS regulation has become an issue since the Supreme Court's 2010 Citizens United decision opened the door for nonprofit groups organized under section 501(c)(4) and 501(c)(6) of the tax code to raise and spend corporate and union money on elections without disclosing donors. The scandal involving the agency's singling out conservative groups applying for nonprofit status has increased attention to the regulation, especially among Democratic lawmakers.
"The statute is very clear," Van Hollen said during the keynote address at a conference on money and politics held by the Brennan Center for Justice. "It says that a 501(c)(4) organization is reserved for entities that are engaged 'exclusively' in social welfare activities, and it's not clear to me what part of 'exclusive' the writers of the regulation didn't get when it came to this particular provision of the law."
Van Hollen noted that the Campaign Legal Center and Democracy 21 have petitioned the IRS, seeking a review of the regulations for allowable political activity for nonprofits, and a definition of how much of the groups' budget or time meets the definition of "primarily." The IRS did not respond to those petitions.