In the News: Wall Street Journal: IRS Rules on Nonprofits’ Political Activity Get Mixed Reaction

By Thomas Catan

Mr. Keating, who previously worked for Club for Growth, one of the conservative groups that could be affected by the new rules, criticized one of the new IRS proposals, which would count as political work any communications naming a candidate in the run-up to an election.

He said he also would be closely watching the outcome of a separate rule expected from the IRS on how much political activity a nonprofit can engage in before it stops qualifying for tax-exempt status. Many 501(c)(4) organizations have worked under the assumption that they cannot spend more than half of their funds on overtly political activity, but the IRS could set a more restrictive standard.

“The ultimate percentage that can be devoted to these activities—which we believe in fact do constitute ‘social welfare’ activities—will tell us whether this is an effort to clarify the law or simply to smother political speech,” Mr. Keating said.

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