How to fix the IRS nonprofit division
The Internal Revenue Service’s nonprofit regulation division has been systematically weakened — stripped of resources and authority — by Congress. And it’s all but quit regulating politically active nonprofits in a meaningful and consistent way.
That’s the grim takeaway from a Center for Public Integrity investigation published Tuesday.
Since then, many readers have asked what can be done.
Three potential fixes surfaced most frequently in interviews with more than two-dozen current and former IRS employees, as well as with lawyers and campaign reform advocates:
Find a better funding source for nonprofit regulation. The IRS’ exempt organizations division is ill-equipped to regulate the onslaught of political spending by nonprofits since the Supreme Court’s Citizens United v. Federal Election Commission decision in 2010. The nonprofit regulation division’s budget shrunk 6 percent since Citizens United, from $101.2 million during 2010 to $95.4 million during 2013. Division staffing dropped more than 8 percent, from 900 in 2010 to 824 in 2013.
But relying on Congress for additional funding will likely prove futile, as demonstrated by many lawmakers’ desire to further slash the IRS’ budget. Some former employees suggest using revenue from an existing tax on private foundations to help pay for nonprofit regulation. That was the intent of the tax, approved by law roughly 40 years ago. But Congress never appropriated the money for that cause. The tax could be applied to a broader range of nonprofit.
Related: Hobbled IRS can't stem 'dark money' flow
There’s more to this story. Click here to read the rest at the Center for Public Integrity.
This story is part of Primary Source. Primary Source keeps you up-to-date on developments in the post-Citizens United world of money in politics. Click here to read more stories in this blog.
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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.
