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The State Department, in tandem with the IRS, will soon have the ability to “block Americans with ‘seriously delinquent’ tax debt from receiving new passports and will be allowed to rescind existing passports of people who fall into that category.” This new law will likely begin in January 2016.
The roots of this new law began back in 2012, a report issued by the GAO suggested the possibility of tying tax collection to passport issuance, in an effort to collect revenue. Soon thereafter, Senator Harry Reid introduced a bill in Congress that did just that, with a threshold of $50,000 in delinquency. The bill been attempted several times in Congress over the last few years.
Most recently, the new rule proposal is tucked into a highway-funding bill (HR22) that currently sits in committee and is likely to be voted on sometime in December.
Though there will be exceptions to the rule (emergency and humanitarian travel, for instance), valid criticisms of the rule were raised earlier this year in Forbes. For instance the proposal “isn’t limited to criminal tax cases or even situations where the government fears you are fleeing a tax debt. In fact, if the bill is passed you could have your passport revoked merely because you owe more than $50,000 and the IRS has filed a notice of lien.
A $50,000 tax debt is easy to amass today. In addition, tax liens are pretty standard. The IRS files tax liens routinely when you owe taxes. It’s the IRS way of putting creditors on notice so the IRS eventually gets paid. In that sense, the you-can’t-travel idea seems extreme. Some commentators noted that a far smaller sum of unpaid child support can trigger similar passport action. Others attack the proposal as potentially unconstitutional.”
The Joint Committee on Taxation has estimated that the new law would raise about $400 million over the next decade.
A serious problem, however, looms for millions of U.S. citizens living abroad. Passports, obviously, are essential for travel, residency permits, banking, school, and work visas; yet, the IRS has documented trouble with getting mail properly to ex-pats.
The Wall Street Journal mentioned noted that ” a report issued in September by the Treasury Inspector General for Tax Administration, or Tigta, a watchdog agency, found that the IRS sent 855,000 notices to U.S. citizens abroad in 2014. According to the report, ‘IRS data systems aren’t designed to accommodate the different styles of international addresses, which can cause notices to be undeliverable.’
The Tigta report said that ‘current IRS processes for addressing international mail issues are ineffective or nonexistent.’ In response, the IRS said that Tigta’s recommendations wouldn’t overcome the agency’s ‘budgetary, statutory, and operational constraints.’ ”
The implementation of this new law will be worthwhile to watch in the coming months, especially as it will likely affect those living abroad.
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A must read from the Washington Examiner today on the subject of Obamacare, insurance companies, and bailouts. I republished the article in full.
The Department of Health and Human Services attempted to reassure private insurers on Thursday that they’ll be able to recover losses from participating in Obamacare by claiming it was an “obligation” of the U.S. government to bail them out.
At issue is a provision within the law known as the risk corridors program. Under the program, which runs from 2014 through 2016, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. The idea was to provide training wheels to insurers in the first years of Obamacare’s implementation, and to take away any incentive for insurers to cherry pick only the healthiest customers.
Republicans, fearing that this could turn into an open-ended government bailout in the event of industry-wide losses, included a provision in last year’s spending bill that limited the program, requiring HHS to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding. President Obama signed that bill.
Now that insurers have been able to look at medical claims, what they’ve found is that enrollees in Obamacare are disproportionately sicker, and losses are piling up. For the 2014 benefit year, insurers losing more than expected asked for $2.87 billion in government payments through the risk corridors program, but HHS only collected $362 million from insurers performing better than expected. Thus, the funds available to the federal government only amounts to 12.6 percent of what insurers argue that they’re owed.
So insurers are not happy. And now the industry lobbying group America’s Health Insurance Plans — which happens to be helmed by Marilyn Tavenner, who previously oversaw the implementation of Obamacare as head of the Centers for Medicare and Medicaid Services — is aggressively fighting for more money.
In a statement issued Thursday, the same day that the nation’s largest insurer, UnitedHealth announced it may exit Obamacare due to mounting losses, Tavenner said, “We’ve been very clear with the administration about the serious challenges facing consumers and health plans in this Exchange market. Most recently, nearly 800,000 Americans have faced coverage disruptions as a result of the significant and unexpected shortfall with the risk corridors program. When health plans cannot rely on the government to meet its obligations, individuals and families are harmed as a result. The administration must act to ensure this program works as intended and consumers are protected.”
In an effort to reassure the industry, CMS, the HHS agency Tavenner previously led, issued guidance reiterating that HHS would use money collected from insurers in 2015 and possibly 2016 to make up the $2.5 billion shortfall that exists in 2014.
But what happens if there still isn’t enough money, and after 2016, the program is taking in less than the money sought by insurers?
HHS said it, would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”
The agency further added: “HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers, and HHS is recording those amounts that remain unpaid following our 12.6 percent payment this winter as fiscal year 2015 obligation of the United States government for which full payment is required.”
In reality, this doesn’t mean much at all. Risk corridor payments for 2016 won’t be due until mid-2017, and by that point, it will be an issue for a future Congress and future president. Nothing that a previous administration’s HHS said in 2015 will really matter.
That said, this is another demonstration that for all of Obama’s sanctimonious rhetoric about taking on insurance companies. In reality, his signature legislative achievement was to put government in bed with private insurers. And now that his pet project backfired, he wants taxpayers to take care of those very insurance companies he spent years railing against.
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In an effort to encourage people to sign up for the Affordable Care Act, the Obama Administration has boosted the low cost of premiums — the part that is subsidized. What they aren’t mentioning is that in exchange for low monthly costs, enrollees face high deductible costs.
“Most Americans will find an option that costs less than $75 a month,” President Obama said. Additionally, Sylvia Mathews Burwell, the Secretary of Health and Human Services, issued a report analyzing premiums in the 38 states that use HealthCare.gov. “Eight out of 10 returning consumers will be able to buy a plan with premiums less than $100 a month after tax credits,” she said.”
The trade-off for low-ish premiums means that many Obamacare plans have high deductibles. “The Internal Revenue Service defines a high-deductible health plan as one with an annual deductible of at least $1,300 for individual coverage or $2,600 for family coverage.”
But in many states, deductibles are even higher than that. According to Hot Air, “in many states, more than half the plans offered for sale through HealthCare.gov, the federal online marketplace, have a deductible of $3,000 or more. Once you add in several hundred dollars per month for your plan premium, a rate that may or may not be lower than it used to be and add in a $3,000 or more deductible, the average individual could be paying over $5,000 out of pocket in a year before their ‘affordable’ insurance kicks in. This is true for employer sponsored plans as well.”
These costs are exorbitant for working class families. If they are already needing to seek health insurance and subsidies through the Obamacare exchanges, how can they possibly have the capability to find several extra thousand dollars in their budgets in order to pay out-of-pocket costs to meet their deductibles before their insurance really kicks in. With unemployment high and wages flat, these rising deductibles (and also premiums in many cases) hit Americans hard.
And don’t forget, plans purchased are for 2016. The Obamacare penalty fee continues to ramp up for those who decide to forgo health insurance coverage entirely for this coming year. Those considering opting should be reminded of what the financial costs will be to do so.
Your penalty tax is the greater of either 1) a flat-dollar amount based on the number of uninsured people in your household; or 2) a percentage of your income. If you are able to go by the flat-dollar amount, the fee increases to $695 in 2016 plus half that amount for each uninsured child under age 18. Your total household penalty is capped at three times the adult rate. If you qualify for the percentage of your income, it is 2.5% for this coming year.
It is increasingly clear as we continue along the path of the Affordable Care Act that this legislation truly is not affordable.
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Congress is slated to take up the Fed Oversight Reform and Modernization Act (FORM Act) this week. The FORM Act. It includes four key policy changes. A summary from the Daily Signal:
1) Require the Federal Reserve to Operate Under a Rules-Based Framework.
Throughout its history, the Fed has operated within a purely discretionary policy framework. Rules-based monetary policy, on the other hand, gives a central bank a clear set of guidelines that credibly commit it to future policy actions.
Naturally, central banks will be hesitant to support this type of policy change because it limits their discretionary authority, but the FORM Act would allow the Fed to choose its own monetary policy rule. Furthermore, the new framework would give the Fed the flexibility to stop following its policy rule, provided that it explains its decision to Congress.
This approach would greatly reduce uncertainty concerning the Fed’s future policy actions without overly restricting the Fed.
2) Restrict the Fed’s Emergency Lending Authority.
The Fed has a long history of lending to insolvent firms, and the best approach to fixing this problem would be to eliminate the Fed’s emergency lending authority.
The FORM Act doesn’t go this far, but it would implement restrictions aimed at making it more difficult to lend to insolvent firms at subsidy rates of interest, a major problem during the 2008 crisis.
3) Audit the Fed.
Many commentators have pointed out that the Federal Reserve is already subject to financial audits, but the Fed’s monetary policy decisions are off limits to Government Accountability Office (GAO) audits. The FORM Act would remove the restrictions that prevent such GAO audits, thus allowing for a retrospective exam of the Fed’s monetary policy actions.
Critics paint these policy audits as harassment of the Fed, but the GAO is an independent, nonpartisan congressional watchdog that regularly investigates federal agencies. Several former GAO officials have even pointed out that critics of “Audit the Fed” are maligning the GAO. No aspect of what the Federal Reserve does should be off limits to the GAO.
4) Establish the Centennial Monetary Commission.
The FORM Act’s Centennial Monetary Commission is a bipartisan congressional commission based on the one proposed in the Centennial Monetary Commission Act of 2013. The goal of this type of policy would be to “establish a commission to examine the United States monetary policy, evaluate alternative monetary regimes, and recommend a course for monetary policy going forward.”
The commission’s recommendations would not bind Congress to implement any legislation, but it would provide Members of Congress with information they need to fulfill their constitutional responsibilities for monetary policy. Moreover, such a commission would provide a public venue for both critics and supporters to discuss the Fed’s past operations and the appropriate role for the central bank going forward.”
Both President Obama and Fed Chairwoman Janet Yellen vehemently opposes the monetary reforms. “In a letter Monday to House Speaker Paul Ryan and Minority Leader Nancy Pelosi, Yellen called the proposed law a “grave mistake,” that would undermine Fed policy and the greater U.S. economy.” Yellen further claimed that the FORM Act could cause “millions of Americans to suffer” and would “politicize monetary policy.” Likewise, President Obama threatened to veto the bill if it passed because “the proposal would politicize the Federal Reserve’s monetary policy decisions.”
Peter Wallison from AEI provided some perspective on the FORM Act; he contends that the FORM Act is a positive bill that will bring greater information to financial markets. “Indeed, lack of information on something as important as monetary policy can be harmful to investors and to the economy as a whole, because investors and businesses deploy capital based on what they think will happen to interest rates in the future. The less information, the riskier these deployments are; the riskier they are, the more costly they are to make — which is why they may not be made at all. In addition, lack of information introduces unnecessary market volatility, as investors and businesses have to buy or sell securities — or even cancel contemplated transactions — because facts about the Fed’s policies have now come to light that show investors or businesses were operating on the wrong assumptions. This volatility is also costly for the economy.”
Congress has not yet voted on the FORM Act, and it is unknown whether it has the ability to pass. Nevertheless, the conversation about financial reform, and the role of the Fed — who has not always acted independently in recent years — is worthwhile.
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As previously noted, the government debt skyrocketed $339 billion the first day after the debt ceiling was lifted via the spending deal. Now, after 10 days (Nov 12), the total new debt has reached $462 billion.
The initial spike was the result of replenishing the funds that have been total new debt”>”frozen”. “The government began bumping up against the debt limit in March and was borrowing from other funds — using “extraordinary measures” — to keep from breaching the $18.1 trillion level. Treasury Secretary Jacob Lew was able to stretch that borrowing through the end of October.”
The $339 one-day splurge was the greatest Treasury jump ever recorded, but still comparable to actions in recent years. In August 2011, after a negotiation was reached, the Treasury debt increased $238 billion on one day; likewise, in 2013 in a similar scenario, the debt rose $328 billion on one day.
Of what does the $339 consist? “About $199 billion is public debt, which is money borrowed from outside sources, and $140 billion is borrowing from within government accounts. As of Monday, the gross total debt stood at $18.6 trillion, with $13.4 trillion of that public debt borrowed from the outside.”
By the end of Obama’s presidency, government debt is projected to be about $20 trillion — nearly double that which existed when Obama became President ($10.6 trillion). Already, the government is running a deficit. 1 month in to the fiscal year (beginning October 1), spending exceeded revenues by $136 billion. “up 12 percent compared with the previous October, as spending ballooned and taxes remained nearly flat. It was the worst October since 2010, when the government was still spending on the stimulus and was on pace for a deficit of more than $1 trillion that year.”
The situation looks mighty bleak right now.
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The Social Security Administration had record spending in fiscal year 2015, totaling $944,143,000,000. This total includes Social Security payments, disability payments, Supplemental Security Income payments, and the costs to administer these programs.
From CNSNews:
“As of September, there were 59,737,817 beneficiaries getting Social Security or disability benefits, according to the SSA. At the same time, according to the Bureau of Labor Statistics, there were 148,800,000 people who had either a full- or part-time job in the United States. That means there were only 2.49 people with jobs for each of the 59,737,817 Social Security and disability beneficiaries.
At the same time, there were only 121,839,000 people with full-time jobs in the United States in September, according to BLS. Those 121,839,000 full-time job holders equaled about 2.04 for each of the 59,737,817 people getting Social Security or disability benefits.
The $944,143,000,000 spent by the Social Security Administration in fiscal 2015 equaled about $6,345 for each of the 148,800,000 persons in the country with a job as of September. It equaled about $7,749 for each of the 121,839,000 people with a full-time job.
The $944,143,000,000 that the Social Security Administration spent in fiscal 2015 was also $381,637,000,000 (or about 68 percent) more than the $562,506,000,000 that the Treasury says the government spent on the Department of Defense and military programs during the year.”
The spending items include:
— $733,716,000,000 in benefits payments from the Old-Age and Survivors Insurance Trust Fund
— $3,505,000,000 in payments to cover administrative expenses for that fund
— $4,258,000,000 in payments to the Railroad Retirement Account
— $143,009,000,000 in disability benefit payments
— $2,881,000,000 in payments for administrative expenses for the disability trust fund
— $419,000,000 in additional payments to the Railroad Retirement Account.
— $58,901,000,000 for the Supplemental Security Income Program.
This was an increase of $33 Billion from fiscal year 2014. A quick analysis of the beneficiaries for the month of October included: “39,968,311 retired workers, 2,330,148 spouses of retired workers, 641,654 children of retired workers, 6,077,209 survivors of deceased workers, 8,922,858 disabled workers, 143,164 spouses of disabled workers, and 1,749,236 children of disabled workers.”
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The Bureau of Labor Statistics released its latest monthly report today. The October numbers women’s employment retreated just slightly from the record it set in September: 56,540,000 women over the age of 15 were unemployed.
Overall, 94,513,000 people in America were out of work during the month of October. This is the lowest it has been in 38 years; only 62.4% of Americans age 16 and above were either looking for work or working.
The Obama Administration still continues to tout the unemployment rate as being low — this month it was tabulated to be 5%. But the only reason it is low is because so many people HAVE given up working or even looking for work, which is accurately reflected in the labor participation rate. With fewer people being counted as “working,” the unemployment numbers calculated among a smaller pool of people makes the rate sound smaller.
But everyday Americans are not fooled by statistics.
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Rich Lowry over at National Review pointed out some hard realities of Obamacare as we enter in a new enrollment season.
“Yes, ObamaCare has covered more people and has especially benefited those with pre-existing conditions (to be credible, Republican replacement plans have to do these things, as well), but the program is so poorly designed that, surely, even a new Democratic president will want to revisit it to try to make it more workable.
Enrollment is falling short. The Obama administration projects that it will have roughly 10 million people on the state and federal exchanges by the end of next year, a staggering climb-down from prior expectations. The Congressional Budget Office had predicted that there would be roughly 20 million enrollees. If the administration is to be believed, enrollment will only increase about another million next year from its current 9 million and only sign up about a quarter of the eligible uninsured.
Premiums are rising. Not everywhere, but steeply in some states. Indiana is down 12 percent, but Minnesota is up 50 percent. Health care expert Robert Laszewski points out that it’s the insurers with the highest enrollment and therefore the best information about actual enrollees that have tended to request the biggest increases — a sign that they don’t like what they’re seeing in their data.
Relatedly, the economics are shaky. According to a McKinsey Co. analysis, last year health insurers lost $2.5 billion in the individual market that ObamaCare remade. ObamaCare co-ops that were supposed to enhance choice and lower costs have been failing and almost all of them are losing money, a victim of the absurd rules (no industry executives on their boards, no raising capital in public markets, etc.) imposed on them by the law.
The problem with ObamaCare in a nutshell is that on one hand, by imposing motley regulations and mandates, it increases the price of health insurance, and on the other hand, by providing subsidies, it tries to hide the cost — but not enough.
According to an analysis by the health consultancy Avalere, the poor or near-poor have been signing up, but enrollment steeply drops off further up the income scale as the subsidies fall away. It found that three-fourths of uninsured people earning less than 150 percent of the federal poverty level got coverage through Medicaid or the exchanges, while almost none of uninsured making more than 250 percent of the federal poverty level have enrolled.
For them, it’s just not a good deal. A study of the ObamaCare exchanges by researchers at the Wharton School found that “even under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare.”
Even the success that ObamaCare has had enrolling people should come with an asterisk. The Department of Health and Human Services announced earlier this year that nearly 11 million people have signed up for public health insurance — Medicaid or the children’s health program, CHIP — since 2013. If Medicaid is better than nothing (although this is harder to prove than you might think), it is substandard coverage that locks the poor into second-class care with limited access to doctors.
If the goal was to expand this deeply flawed program, it could have been achieved without the expense, disruption and economic irrationality of the rest of ObamaCare.
(emphasis added).
As Laszewski points out, on the individual market, ObamaCare is a monopoly. It gives money to people to buy its product and through the individual mandate punishes those who don’t. And yet it’s still having trouble making the sale.”
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Reince Priebus had a swift and forceful response to the mockery that was the CNBC debate hosted on Wednesday night. Though I am not particularly a fan of the RNC, in this instance, Priebus was correct to call out the behavior of the moderators and the breech of agreement that occurred. Here’s his letter in full below:
Mr. Andrew Lack
Chairman, NBC News
30 Rockefeller Plaza
New York, New York 10112
Dear Mr. Lack,
I write to inform you that pending further discussion between the Republican National Committee (RNC) and our presidential campaigns, we are suspending the partnership with NBC News for the Republican primary debate at the University of Houston on February 26, 2016. The RNC’s sole role in the primary debate process is to ensure that our candidates are given a full and fair opportunity to lay out their vision for America’s future. We simply cannot continue with NBC without full consultation with our campaigns.
The CNBC network is one of your media properties, and its handling of the debate was conducted in bad faith. We understand that NBC does not exercise full editorial control over CNBC’s journalistic approach. However, the network is an arm of your organization, and we need to ensure there is not a repeat performance.
CNBC billed the debate as one that would focus on “the key issues that matter to all voters—job growth, taxes, technology, retirement and the health of our national economy.” That was not the case. Before the debate, the candidates were promised an opening question on economic or financial matters. That was not the case. Candidates were promised that speaking time would be carefully monitored to ensure fairness. That was not the case. Questions were inaccurate or downright offensive. The first question directed to one of our candidates asked if he was running a comic book version of a presidential campaign, hardly in the spirit of how the debate was billed.
While debates are meant to include tough questions and contrast candidates’ visions and policies for the future of America, CNBC’s moderators engaged in a series of “gotcha” questions, petty and mean-spirited in tone, and designed to embarrass our candidates. What took place Wednesday night was not an attempt to give the American people a greater understanding of our candidates’ policies and ideas.
I have tremendous respect for the First Amendment and freedom of the press. However, I also expect the media to host a substantive debate on consequential issues important to Americans. CNBC did not.
While we are suspending our partnership with NBC News and its properties, we still fully intend to have a debate on that day, and will ensure that National Review remains part of it.
I will be working with our candidates to discuss how to move forward and will be in touch.
Sincerely,
Reince Priebus
Chairman, Republican National Committee
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During Congressional testimony on Tuesday, John Koskinen defended his tenure as Commissioner of the IRS against stirrings of impeachment among some elected officials. Koskinen maintained that there has been an ample turnover of personnel, as well as disciplinary reviews within the IRS, so that the IRS has been positively rehabilitated since the scandal erupted in 2013.
While the accusation of charges against Koskinen — accused of “misleading the public and destroying documents that were being sought under a congressional subpoena” — was newsworthy, another portion of his testimony was just as important, but went largely unreported by the the media: the future role of 501c4s.
Koskinen framed part of the reason for the IRS targeting scandal on confusing rules, “leaving the nonprofit groups and IRS auditors uncertain about what activity was allowed.” However, this assertion is utterly nonsensical, as the rules that govern 501c4 activity have been in place since 1959. So why the sudden interest in the last couple of years to create (or “clarify”) rules that limit activities by nonprofit organizations? Because of the 2016 election.
Don’t forget — the IRS tried to do a major rewrite in 2014 ahead of midterm elections, but received an unprecedented amount of comments during the IRS rulemaking comment period. If you added together all of the comments on all Treasury and IRS draft proposals from the seven prior years and doubled that you came close to the number of responses received, which was more than 150,000. In light of the overwhelming response on the proposed changes, the IRS decided to delay any rules changes.
So here we are on the threshold of another major election cycle, and we have the IRS announcing it will be stirring the pot. The Washington Times reported that Koskinen hopes, “that we’d be able to provide these proposed new rules early enough next year so that they could — the work on them can be completed well in advance of the election so there wouldn’t be any confusion.” And more: “But I would stress that the work that we’re doing now is focused on clarifying — not changing — but clarifying the rules under which organizations operate.”
Yet this is onerous and unnecessary. These are your social welfare organizations, for which advocacy for “the common good and general welfare” is their primary purpose. They differ from 501c3, which are your charitable organizations; 501c5s, your labor unions; and 501c6s, your trade organizations. The one thing all of these organizations do have in common is that they are all tax-exempt organizations.
501c4s are not tax-deductible precisely because they are not political organizations. They serve to educate by being issue-based. This is protected under free speech; so long as the 501c4 sticks to an issue and not advocate for a particular candidate, it is not considered political speech and therefore it cannot be curbed. They can talk about policies and positions, not people.
These social welfare groups can therefore participate in the political arena as long as they maintain education as their primary purpose. Some examples of 501c4s would be the National Rifle Association (NRA), American Association of Retired Persons (AARP), Americans for Tax Reform (ATR), and the Sierra Club. 501c4s themselves have been around for nearly 100 years, and the regulations that currently govern them have been in place since 1959.
And yet the IRS has been increasingly adamant about clarifying the rules for social welfare organizations that have been in place for more than 50 years. And why only the social welfare organizations — not the unions or trade organizations?
It is well known that on issue-based advocacy, the Republicans have made much better use of 501c4s than the Democrats. So of course, the Democrats want to find a way to disrupt this. Dozens of articles in recent years have documented how this conservative group and that conservative group spent money on political ads, more than the liberal groups — as if that is somehow unfair. It’s perfectly fair and perfectly legal, except when the Democrats are on the losing/receiving end.
This situation is reminiscent of the repeated attempts to implement the “Fairness Doctrine” for talk radio, pushing to give conservative and liberal talk radio shows “equal air time” — because the conservatives dominate that market as well.
The IRS tried reforming 501c4s in 2014 because they knew the Democrats were vulnerable. It didn’t get done then, and 2014 was a disaster year for Democrats. What better way to stifle the ability for conservatives to message than by attacking the methodology? The Democrats, in cahoots with the Obama Administration, are working in tandem with the IRS to change to the way social welfare organizations function by introducing very specific and onerous rule “clarifications”.
By trying to redefine some activities as “political” instead of advocacy, they would be opened to being limited or even banned — activities which serve to provide education for the common good, as they always have.
Critics of the way 501c4s operate, which allow their donors to remain protected, suggest that the 501c4s are somehow gaming the system — using phrases like “secret donors” and “secret activity” to inflame the public against 501c4s. But this is patently untrue.
Political donors are required to be disclosed under campaign finance, but since 501c4s are specifically not political organizations, the donor names do not need to be made public. Their anonymity is protected under the Right of Free Association. Those who are on the receiving end of 501c4 activities to educate the populace during the election cycle, however, are now pushing for this to change in order to reveal citizens identities.
Therefore turning a simple and known definition of a 501c4 into a new and incomprehensible one, has the effect of stifling speech. Even the mere presence of such a proposal will have detrimental affect. Why? The possibility of new regulations becoming permanent rules will have 501c4s worried about potential infractions — especially as we are recovering from the 2013 IRS targeting scandal, especially since the IRS has been known to issue rules that are effective immediately, and even retroactively.
The most egregious part is that we probably won’t have the ability to comment on proposed changes this time around. According to the IRS bulletin (last revised April 2015), the IRS states, “Given the diversity of views expressed and the volume of substantive input, we have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation. Treasury and the IRS remain committed to providing updated standards for tax-exemption that are fair, clear, and easier to administer.”
In other words, they don’t want to hear feedback this time around. What good is a “public hearing?” It’s not, of course, at least for the public. But from the vantage point of the 2016 presidential elections, the effect of curbing or scaring the activity of 501c4s during the upcoming election cycle is beneficial. What organization would risk the potential for increased scrutiny and possible violation from the IRS, knowing that the IRS has been operating in an unjust and partisan matter? They wouldn’t. So the 501c4s would have to be more careful for at least the time being, which plays right into the timing of the important 2016 election cycle activity.
The IRS continues to act in an incompetent manner. That they are targeting 501c4s, and not c5s and c6s, show that there is an inherent bias internally within the IRS. No one can look at the situation and not think that this isn’t being done to have an affect on our political cycles. This is not how the IRS is supposed to function in our country.
