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-Spencer L. Simons, former Director, O'Quinn Law Library and Associate Professor of Law



Friday, May 23, 2014

IRS Delays New Regulations Designed to Limit Political Activity by Non-profits


The New York Times is reporting that the Internal Revenue Service has decided to postpone implementation of new tax regulations designed to discourage political activity from groups given tax exempt status by the agency. See the IRS' official announcement. According to the article, the proposed regulations which specify what constitutes "political activity" and  limit expenditures on such activity yielded 150,000 comments from the public. The rules are not expected to go into effect until after this year's midterm elections.

Internal Revenue Code (I.R.C.) Section 501provides the authority for such tax exempt status with 501(c) listing the different types of entities that are eligible. The proposed rule, titled "Guidance on "(Section 501(c)(4)) tax exempt social welfare organizations on political activities related to candidates that will not be considered to promote social welfare" was announced in the Federal Register on Friday, November 29, 2013. More information regarding current regulations can be found on the IRS' "Exempt Organizations, Tax Code, Regulations, and Official Guidance" page.


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