By Hillary Flynn and Rachael Bade
3/18/15 8:20 PM EDT
The IRS may broaden a looming controversial rule to police political nonprofits to include political parties and political action committees, the IRS chief said Wednesday.
IRS Commissioner John Koskinen said the agency may expand a yet-to-be-released rule governing 501(c)(4), “social welfare” groups, to include political groups known as 527s, which focus on elections. It could require them both — as well as other types of tax-exempt groups — to operate under the same definition of “political activity.”
“If it’s going to be a fair system, it needs to apply across the board,” Koskinen said when asked by POLITICO if such groups would be included in the new rule. “[I]f we have a set of definitions for 501(c)(4)s, what about everybody else? Can they do more or less [political activity]? And for us as (an) administration, for ease of administration, it makes sense to have this common definition.”
The impact of extending the proposed rule to groups registered under section 527 of the code is unclear, since a majority of these groups that are most active at the federal level are also registered with the Federal Election Commission.