House Republicans for the first time Wednesday linked new IRS rules designed to clamp down on nonprofits with embattled former IRS employee Lois G. Lerner, saying her involvement taints the entire process and should force the tax agency to cancel its crackdown.
Republicans argue that the rules, proposed in November, are designed to silence interest groups’ free speech — which they say was the same reason the IRS asked intrusive questions and delayed tea party groups’ applications for tax-exempt status over the past few years.
Ms. Lerner, a former head of the division that reviewed those applications, was included on an email in 2012 in which staffers hinted at a secret effort to write the crackdown rules.
The email was released Wednesday by the House Ways and Means Committee, which said it shows Ms. Lerner’s involvement and proves that the rules were in the works for years, not a response to the scandal revealed in June. Republicans said that taints the whole process.
“If Treasury and the IRS fabricated the rationale for a rule change it would tend to raise questions about the integrity of the rule-making process,” said Rep. Dave Camp, Michigan Republican and the committee chairman, who has called on the IRS to cancel the rules change.
Democrats countered that Republicans haven’t proved that the IRS targeted anyone for political reasons and questioned why they are pursuing the investigation since no smoking gun has been found.
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“It’s clear you’re trying to keep this issue alive for political purposes,” said Rep. Sander M. Levin of Michigan, the ranking Democrat on the committee.
The fight has spilled well beyond the boundaries of the IRS. Republicans also have called into question the Justice Department’s criminal probe of the tax agency, arguing that the investigation is tainted by political donations to President Obama made by one of the lawyers in the investigation, and by Mr. Obama’s comments this weekend that seemed to prejudge the outcome, saying there was no corruption.
The House Oversight and Government Reform Committee has a hearing scheduled for Thursday on those matters.
On Wednesday, testifying to the Ways and Means Committee, new IRS Commissioner John Koskinen said he is eager to put the entire business behind him — though he will have to decide whether to move forward with the rules.
Under existing rules, groups that organize as “social welfare” nonprofits under section 501(c)(4) of the tax code are allowed to engage in some political activity as long as it isn’t their primary purpose. Over the past few election cycles, conservative and tea party groups have argued that means they can spend up to 49 percent of their money on political activity.
Democrats said that is stretching the rules and have called for a crackdown.
In November, the day after Thanksgiving, the Obama administration proposed restrictions on activities such as voter registration, get-out-the-vote drives, and the distribution of pamphlets that support a candidate.
Republicans say the effort is intended to silence political dissent. Mr. Camp has demanded that the IRS turn over documents describing the process used to write the rules.
Mr. Koskinen said he hasn’t gone back to look at those documents, nor has he delved into the details of the tea party targeting. He said his goal is to try to put the scandal behind him and restore trust in the agency.
“I want everyone in the United States who’s a taxpayer to understand and be confident that when they deal with the IRS, we will deal with them in a straightforward way,” he said.
He told committee Republicans that he will try to get them the documents they are seeking but that turning over material about how the crackdown rules was written could interfere with the process.
The public has until later this month to comment on the proposed rules, and then the IRS will re-evaluate them, likely hold a public hearing and then decide on a final rule.
Mr. Koskinen said the agency has received a record number of comments on a proposed regulation with 21,000 so far and is not in a hurry to issue a final decision.
“There will be a public hearing. There will be numerous occasions for people to bring any information that they would like, or perspectives, about those regulations forward before they are finalized. And they’re not going to be finalized in the near-term future,” he said.
While Republicans worked to pressure the IRS, Democrats announced plans to try to add taxpayer funding into congressional campaigns as a way of combating what Democrats said was the influence of well-heeled donors.
House Democrats on Wednesday unveiled a proposal to give Americans a $25 tax break for contributing to congressional campaigns. Campaign donations up to $150 also would be matched by taxpayers’ money.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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