U.S. Democratic Representative Chris Van Hollen sued the Internal Revenue Service to force the agency to adopt regulations that mirror federal law on determining whether a group should be given tax-exempt status.
The IRS is illegally allowing a category of tax-exempt groups to engage in election-related activity by loosely interpreting a requirement in the law that they be engaged exclusively in promoting social welfare, according to the complaint Van Hollen filed today in federal court in Washington.
“By redefining ‘exclusively’ as ‘primarily’ in violation of the clear terms of its governing statutes, the IRS permits tax-exempt social welfare organizations to engage in substantial electoral activities in contravention of the law,” Van Hollen and three advocacy groups said in the complaint.
The issue of tax-exempt groups spending money on elections triggered a political furor after the IRS disclosed it gave extra scrutiny to organizations seeking nonprofit status if they had “tea party” or “patriot” in their name. Later, Representative Sander Levin, a Michigan Democrat, said groups with names tied to liberal causes were also subjected to additional scrutiny.
© Copyright 2013 Bloomberg News. All rights reserved.