IRS Response to "Politically Active" Nonprofits Under Fire
An article in today’s Los Angeles Times provides a good summary of the IRS’ Political Activity Compliance Initiative (PACI), which was launched in February to expedite investigations into claims of improper political activity by nonprofits. The article also discusses a new report released by OMB Watch that criticizes PACI and predicts a chilling effect on free speech.
Take particular note of the reaction of Representative Adam Schiff (Democratic from California) to both PACI and the recommendations contained in OMB Watch’s report. The article states, “In December, Rep. Adam B. Schiff (D-Burbank) and two Republican colleagues called for the federal Government Accountability Office to investigate the IRS, expressing concern about the 1st Amendment rights of clergy. The GAO turned down their request, citing confidentiality of IRS investigations, Schiff said.
“The OMB Watch report, Schiff said, has motivated him to again seek a response from the IRS and the Treasury Department. He wants the report’s recommendations to be adopted.
“’I think the guidelines are so ambiguous and unclear, anyone standing behind the pulpit has to be wondering what they can say on the most important issues of the day,’ he said.”
PACI is also coming under attack on another front. According to BNA, Marcus Owens, a former head of tax-exempt organizations and the attorney for All Saints Church, sent a letter yesterday to IRS Commissioner Mark Everson. The letter says that an ongoing delegation procedure in which IRS employees below the level of director of exempt organization examinations have been allowed to determine whether a church should be audited is a “clear violation” of Internal Revenue Code Section 7611. This regulation says that an appropriate “high-level Treasury Department official must reasonably believe (on the basis of facts and circumstances) that a church may not be tax-exempt.” Owens is asking the IRS to revisit the “reasonable belief determination” threshold at an “appropriate high level” and reconsider whether any church tax inquiries or audits already under way are warranted.
Take particular note of the reaction of Representative Adam Schiff (Democratic from California) to both PACI and the recommendations contained in OMB Watch’s report. The article states, “In December, Rep. Adam B. Schiff (D-Burbank) and two Republican colleagues called for the federal Government Accountability Office to investigate the IRS, expressing concern about the 1st Amendment rights of clergy. The GAO turned down their request, citing confidentiality of IRS investigations, Schiff said.
“The OMB Watch report, Schiff said, has motivated him to again seek a response from the IRS and the Treasury Department. He wants the report’s recommendations to be adopted.
“’I think the guidelines are so ambiguous and unclear, anyone standing behind the pulpit has to be wondering what they can say on the most important issues of the day,’ he said.”
PACI is also coming under attack on another front. According to BNA, Marcus Owens, a former head of tax-exempt organizations and the attorney for All Saints Church, sent a letter yesterday to IRS Commissioner Mark Everson. The letter says that an ongoing delegation procedure in which IRS employees below the level of director of exempt organization examinations have been allowed to determine whether a church should be audited is a “clear violation” of Internal Revenue Code Section 7611. This regulation says that an appropriate “high-level Treasury Department official must reasonably believe (on the basis of facts and circumstances) that a church may not be tax-exempt.” Owens is asking the IRS to revisit the “reasonable belief determination” threshold at an “appropriate high level” and reconsider whether any church tax inquiries or audits already under way are warranted.
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