New Rules Would Rein In Nonprofits’ Political Role

The Obama Administration moved to curb political activity by tax-exempt nonprofit organizations, with potentially major ramifications for some of the biggest and most secretive spenders in American politics. New rules proposed by the Treasury Department and the Internal Revenue Service would clarify both how the IRS defines political activity and how much nonprofits are allowed to spend on it.

The proposal covers not just television advertising, but bread-and-butter political work like candidate forums and get-out-the-vote drives. Long demanded by government watchdogs and Democrats who say the flow of money through tax-exempt groups is corrupting the political system, the changes would be the first wholesale shift in a generation in the regulations governing political activity by nonprofits. The new rules would not prohibit political activity by nonprofits. But by seeking to establish clearer limits for campaign-related spending by groups claiming tax exemption, the IRS proposal could have an enormous impact on some of the biggest groups, forcing them to either limit their election spending or register as openly political organizations, such as super PACs.