The Obama administration Tuesday proposed a crackdown on the widespread use of tax-exempt organizations for political campaigning, seeking to reduce the influential role that the secretive groups have played in recent elections.
The new "guidance" issued Tuesday by the Treasury Department and the Internal Revenue Service would curtail a broad array of these tax-exempt entities' activities, including campaign advertising, voter registration, get-out-the-vote efforts, and distribution of voter guides and campaign materials.
The process of completing the new regulations could take months, and officials said they expected a lot of feedback, acknowledging the political battles ahead.
The involvement in politics of tax-exempt groups organized under section 501(c)(4) of the tax code has been viewed by many as the biggest abuse of modern campaign finance rules, which aim to limit the influence of wealthy donors in elections.
The use of these organizations became a prominent issue in recent campaigns when groups such as the conservative Crossroads GPS and liberal Priorities USA raised millions of dollars from donors who could remain anonymous under tax rules. Critics say the groups have been too lightly regulated by the IRS, due in part to confusing regulations.
Rulemaking on Campaigning by Tax-Exempt Groups Could Take Months