Treasury, Lois Lerner planned to change rules for 501(c)(4)s in secret

Treasury, Lois Lerner planned to change rules for 501(c)(4)s in secret

In a House Ways and Means Committee hearing on Wednesday, Republican members highlighted a 2012 email from a Treasury Department official that indicated the Obama administration was planning to revise the rules for 501(c)(4) organizations without notifying the public that it was deliberating this move (emphasis added).

The Obama administration’s Treasury Department and former IRS official Lois Lerner conspired to draft new 501(c)(4) regulations to restrict the activity of conservative groups in a way that would not be disclosed publicly, according to the House Committee on Ways and Means.

The Treasury Department and Lerner started devising the new rules “off-plan,” meaning that their plans would not be published on the public schedule. They planned the new rules in 2012, while the IRS targeting of conservative groups was in full swing, and not after the scandal broke in order to clarify regulations as the administration has suggested.

The June 2012 email, from Treasury official Ruth Madrigal, opened with the following sentence:

“Don’t know who in your organizations is keeping tabs on c4s, but since we mentioned potentially addressing them (off -plan) in 2013, I’ve got my radar up and this seemed interesting…,”

The email goes on to discuss a federal court ruling that allowed the government to use a less-stringent standard in determining whether a 501(c)(4)’s “major purpose” is “political.”  In Madrigal’s opinion, the ruling would bolster the agencies – Treasury and the IRS – in their quest to change the rules on 501(c)(4)s.  That move is expected to silence Tea Party and other limited-government groups.

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As a reminder, what the Obama administration wants to change is not just whether the 501(c)(4) groups can operate tax-free, or how long the government can reasonably delay conferring 501(c)(4) status.  Team Obama also wants to change whether these groups have to disclose their donors or not.  If Team Obama changes the rules so that non-partisan activities, like voting registration drives and issues forums – including voter guides on issues – are considered “political,” under the tax code, 501(c)(4)s will be subject to the rules of expressly partisan political action committees.

The punitive, untrustworthy Obama government will thus gain access to donor lists, and be able to harass and intimidate donors to community-interest groups whose positions Obama officials don’t like.  The most likely targets will obviously be groups that focus on issues like constitutionalism, Second Amendment rights, federalism, local control of education, pro-life advocacy, and religious freedom.  As the administration’s record against 501(c)(3)s indicates, other targets will probably include groups that take a pro-Israel stance on foreign policy.

The Daily Caller piece points out that Ms. Madrigal’s 2012 email clearly contradicts the Obama administration’s claims that it is addressing 501(c)(4) rules now as a response to “confusion” that arose from the targeting of Tea Party groups.  In fact, of course, Team Obama had that intention all along.

A couple of weeks ago, Charles Krauthammer opined in a panel segment on Fox that the IRS couldn’t have the new rules in place before the 2014 election.  But does anyone still think that will matter?  As long as Congress’s only action is to hold hearings, and the Obama administration just keeps getting away with everything it does, the Obama IRS will forcibly suppress any 501(c)(4)s it doesn’t like, regardless of whether the “rules” are in place or not.  The mostly small 501(c)(4) organizations will have no recourse against federal intimidation.

What argument can there be that things will be otherwise?  And when will the tipping point occur at which even our more-complacent Americans – people who understandably don’t want to be reactionary or overly excitable – realize that the “rule of law” idea binds only us citizens today, and not our government?

The rule of law, after all, does not mean that the government gives a perfunctory nod to the idea of it, in order to keep the public quiet while government agencies extort and intimidate the citizens, as much as they can get away with, while no one else is aware of it.

The rule of law means (in part) that even where no one else can see, government officials believe themselves to be both constrained and restrained in respecting the spirit of lawful operation.  Elements of that spirit include the fair and open adoption of regulations, and non-partisan enforcement of those and all other aspects of the law.  The Obama administration clearly does not see itself as constrained by these aspects of lawfulness.  It can’t be trusted with anything now.

One final note: as always, we could prevent this particular situation entirely by not taxing income.

J.E. Dyer

J.E. Dyer

J.E. Dyer is a retired Naval Intelligence officer who lives in Southern California, blogging as The Optimistic Conservative for domestic tranquility and world peace. Her articles have appeared at Hot Air, Commentary’s Contentions, Patheos, The Daily Caller, The Jewish Press, and The Weekly Standard.


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