The Internal Revenue Service's new commissioner, John Koskinen, told a congressional hearing Wednesday that the IRS has received an unprecedented number of comments on its proposed regulations for 501(c)4 tax-exempt groups and they will not be finalized anytime soon.
The Treasury and the IRS issued initial guidance last November to clarify how much political activity the groups, which are supposed to be primarily devoted to social welfare, are allowed to engage in, after a scandal erupted last year over the IRS's so-called “targeting” of Tea Party groups that had applied for tax-exempt status (see Treasury and IRS Issue Guidance for 501(c)4 Tax-Exempt Social Welfare Organizations). The IRS was forced to admit that it used terms such as “Tea Party” and “Patriot” to filter out and group together applications from conservative groups for extra scrutiny, although it later emerged that it also screened for terms such as “Progressive” and “Occupy” in the names of left-leaning groups. The revelations led to the ouster of several high-ranking IRS officials along with revised procedures for dealing with the applications.
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