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Colorado Nonprofit Association Comments on IRS Rules on 501(c)(4) Political Activity

Jul 4, 2014

The IRS announced on May 22 that it is likely to revise proposed regulations on 501(c)(4) political activity in light of receiving more than 169,000 public comments. Public hearings will be postponed until after the regulations are revised. 

On November 29, 2013, the IRS issued a notice of proposed rulemaking to provide clear guidance to 501(c)(4) social welfare organizations on political activities. The proposed rule defines “candidate-related political activities” to include not only communications that express views on candidates, but also communications that identify candidates close to an election and many voter engagement activities. The notice also request feedback on “what proportion of an organization’s activities must promote social welfare… and whether additional limits should be imposed on activities that do not further social welfare.” The notice raised questions of whether similar rules should apply to 501(c)(3) organizations. 

Comments Submitted to the IRS on Proposed Regulations for 501(c)(4) Organizations.

On February 26, 2014,  we submitted comments to the IRS on their proposed regulations for political activity by 501(c)(4) organizations. We appreciate the complexity of developing clear rules to appropriately limit campaign activities by 501(c)(4) organizations and address the issues of “dark money” in our nation’s campaign finance system. However, the proposed rules could have adverse consequences for 501(c)(3) organizations, which is why the IRS should work with tax-exempt organizations and other stakeholders to draft a new set of rules.

Our comments