Policy Update

Representatives Ask for IRS Guidance on Political Intervention

9/20/2006

Source: Independent Sector

In a September 18 letter, Representatives Adam Schiff (D-CA) and Walter Jones (R-NC) urged the Internal Revenue Service to clarify tax-exempt organization rules on political intervention.  Explaining their motivation, the congressmen said they fear the agency's new political activity compliance initiative - launched in February to investigate noncompliance with political intervention rules - could impact nonprofits' ability to become involved with public policy issues.  Source: BNA Daily Tax Report

IRS Outlines Political Intervention Rules

Meanwhile, during a phone forum yesterday, IRS officials outlined political intervention regulations and offered guidance to help tax-exempt organizations avoid prohibited political activities.  The officials stressed that tax-exempt organizations are allowed to engage in get-out-the-vote activities, however, must do so in a nonbiased manner. 

Among other advice, the officials offered three tips to ensure candidate appearances at nonprofit events comply with tax laws: organizations must provide an equal opportunity to political candidates seeking the same office; they cannot support or oppose any candidate; and they must prohibit any political fundraising.  Source: BNA Daily Tax Report 

AARP Rolls Out Voter Education Campaign

AARP has launched a nationwide campaign encouraging its constituents to educate themselves about candidates' positions before voting in November.  Although similar to previous voter education efforts, AARP says it plans to be more aggressive this year.  Among other activities, the AARP campaign will include national and local television ads, voter guides, and Internet ads focusing on issues such as Social Security and Medicare.  Source: The Hill 

IRS Officials Outline Projects in Tax-Exempt Area

IRS officials offered insights into the agency's upcoming plans at the American Health Lawyers Association annual conference on tax issues for healthcare organizations.  Catherine Livingston, Assistant Chief Counsel of the IRS' Tax Exempt/Government Entities Division, told attendees that she expects to finalize revocation standard regulations delineating when excess benefit transactions could threaten an organization's tax-exempt status.  The agency is also likely to issue tax-exempt bond guidance and will continue its political activity compliance initiative. 

Marvin Friedlander, Manager in the TE/GE Division, addressed issues relating directly to nonprofit hospitals.  Referring to surveys distributed by the IRS to nonprofit hospitals, Friedlander said the agency will analyze the responses, develop appropriate education initiatives, issue guidance, consider modifications to the Form 990, and initiate additional examinations as necessary.  Source: BNA Daily Tax Report

Outlook: Estate Tax

House Majority Leader John Boehner (R-OH) said yesterday that the House is unlikely to consider estate tax legislation before adjourning for the elections.  House Ways and Means Chair William Thomas (R-CA) had previously said that the House may consider revisiting a plan to reduce the tax.  Meanwhile, Senate Budget Committee Chair Judd Gregg (R-NH) is urging his colleagues to put estate tax reform on hold until after the elections. 
Senate Finance Committee Chair Charles Grassley (R-IA) has said negotiators are considering both holding an estate tax vote before and after the elections.  Source: BNA Daily Tax Report

Earmark Reform in the Senate Unlikely

As the number of legislative days grow smaller, it is becoming less likely that the Senate will pass earmark or lobbying reform rules before November's election.  Senate Administration Ranking Member Christopher Dodd (D-CT), who is tasked with Administration Chair Trent Lott (R-TN) to formulate a package of ethics rules changes, told reporters yesterday that it will be difficult, if not impossible, to reach an agreement before the elections.  The issue is not a top priority for senators, who are focused on homeland security issues.  Source: Roll Call

GOP Aides Work on Continuing Resolution

Republican leadership aides told reporters yesterday that they are working to formulate a continuing resolution (CR) that would temporarily fund federal programs in light of unfinished appropriations bills.  According to the aides, the CR is likely to be in effect until late November.  Confirming the aides' statements, House Majority Leader John Boehner (R-OH) has said the CR will not run until the 110th Congress.  Source: Congress Daily PM