Last November the IRS issued a proposal regarding changes to the political activities of 501(c)(4) nonprofit organizations. The initial proposal was ultimately withdrawn this year after receiving more than 150,000 public comments, including input from Nonprofit VOTE and its partners.
IRS Commissioner John Koskinen noted that “There are three issues: What should be the definition, to whom should it apply and how much … can you do before you jeopardize your exemption?” The IRS initially asked for comments on all three issues but addressed only one in the first round of proposed regulations. “The next resolution will differ from the first draft because it will deal with all three questions,” said Koskinen.
The ultimate goal is “regulations that are fair to everyone, clear and easy to administer.” This clarity will not only benefit the IRS but the organizations themselves who will have specific information on what they can and cannot do.
A new draft of the regulations are expected to be out by early 2015 at which time the public will once again be able to weigh in with comments.
Currently, the IRS determines whether a 501(c)(4) nonprofit is getting too political based on the “facts and circumstances” of each case, a process Koskinen acknowledged as “subjective.”