by James V. DeLong
American Enterprise Institute
March 17, 2014
The IRS recently proposed rules designed to hogtie the electoral activities of the Tea Party movement, while leaving untouched the politicking of unions and business groups. The IRS should back down out of a sense of self-preservation, but it is not clear that maintaining the legitimacy of the agency is anywhere on the administration’s priority list. The idea that nonprofit organizations should not be subject to the income tax is as old as the tax code itself, right from its aborted origin in 1894 (the income tax was declared unconstitutional) and the beginnings of the modern system in 1913 (after the 16th Amendment). The root of today’s problem goes back to 1959 and the IRS grab of authority to regulate the actions of social welfare groups. The goal should be to get the IRS out of regulating political speech by overturning the original regulation, not just last fall’s proposed additions.

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