Van Hollen to join lawsuit against IRS

Rep. Chris Van Hollen (D-Md.) and campaign finance reform advocates are preparing to sue the IRS over the agency’s handling of tax-exempt applications.

Van Hollen, the Campaign Legal Center, Democracy 21 and Public Citizen, who will unveil their lawsuit on Wednesday, have all said that IRS regulations are allowing too many political groups to obtain tax-exempt status.

{mosads}Current IRS rules say that groups seeking 501(c)(4) status cannot have politics as their primary purpose; this is generally understood to mean that those organizations must devote more than half their resources to social welfare.

But Democrats and campaign finance advocates have stressed that current law says that those groups must exclusively concentrate on social welfare, and insist that the IRS regulations have allowed undeserving political groups to gain a tax exemption.

Van Hollen’s lawsuit comes as lawmakers and the Justice Department continue to investigate the scrutiny the IRS gave to Tea Party groups.

GOP lawmakers have stressed that the IRS treated conservative groups more harshly, while Democrats in recent weeks have said that agency singled out liberal groups as well.

Van Hollen has been pushing legislation that would require more public disclosure of campaign-related spending since the Supreme Court’s 2010 Citizens United decision.

Along with other Democrats, he has also suggested that the differences between the regulations and the law may have played a role in the IRS targeting.

“The IRS should not be in the position of having to determine whether the primary purpose of any organization is to engage in political campaign activity versus the promotion of the social welfare,” Van Hollen wrote in May, shortly after the targeting controversy broke.

“Requiring full disclosure and transparency would go a long way to getting the IRS out of the business of making these determinations.”

Democracy 21 and the Campaign Legal Center previously filed a petition over the IRS regulations in 2011.