UPDATE 1-U.S. IRS proposes new rules for tax-exempt political groups
(Adds details, Treasury quote)
WASHINGTON, Nov 26 (Reuters) - The Obama administration proposed new rules on Tuesday that would restrict the political advertising and fundraising abilities of certain tax-exempt groups, which were at the center of the Internal Revenue Service's Tea Party targeting scandal this year.
According to a Treasury Department statement, the proposed rules will change the definition of "social welfare" in the 501(c)(4) section of the tax code, which allows tax-exempt groups to engage in limited campaigning activities.
Such groups mushroomed after a 2010 U.S. Supreme Court ruling that relaxed campaign finance rules. Part of the appeal is that the groups not only are tax-exempt but also do not have to disclose their donors, as long as they spend less than half their time and money on political activities.
Government officials have struggled for years to define what qualifies as political activity.
Under the proposed reforms unveiled on Tuesday, any advertising that names a candidate 60 days before a general election would be considered political activity. Additionally, certain contributions would need to be reported.
The guidance also further clarifies what sorts of contributions and voter outreach qualify as "candidate-related political activity."
"This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by social welfare organizations," Mark Mazur, Treasury assistant secretary for tax policy, said in a statement.
In May, the Internal Revenue Service was engulfed in a scandal over targeting of 501(c)(4) groups that included "Tea Party" and other conservative phrases in their titles.
(Reporting by Patrick Temple-West; Editing by Howard Goller, Karey Van Hall and Jim Loney)