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REG-134417-13 Room 5305 Internal Revenue Servi February 26, 2014 1149 Court Street NE Salem, OR 97301-4030 Telephone: 503.588.0050 Portland: 503.227.5636 Statewide: 800.452.7862 John A. Koskinen Fax: 503.588.0052 Commissioner of Internal Revenue www.aoi.org CC:PA:LPD:PR (REG-134417-13 Room 5305 OFFICERS Internal Revenue Service Chairman of the Board NEIL J. NELSON P.O. Box 7604, Ben Franklin Station Siltronic Corporation Washington, DC 20044 President & CEO JAY M. CLEMENS Associated Oregon Industries RE: Comments on IRS NPRM, REG-134417-13 First Vice-Chair R. PATRICK REITEN Pacific Power Treasurer Dear Commissioner Koskinen: THOMAS J. CORRY Bank of America Merrill Lynch Secretary These comments are submitted on behalf Associated Oregon Industries (AOI) - MARGARET D. KIRKPATRICK Oregon’s Chamber of Commerce - and our 1,500 business members across the NW Natural Immediate Past Chair state. AOI is organized under Section 501(c)(6) of the Internal Revenue Code. HOWARD D. WERTH Leupold & Stevens, Inc. Although the proposed rule in its current form addresses only Section 501(c)(4) organizations, the rulemaking notice threatens that the agencies may later seek EXECUTIVE COMMITTEE to extend these same kinds of rules to other organizations, including trade JON E. BLADINE associations and chambers of commerce. We strongly oppose the proposed Oregon Lithoprint, Inc. CARMEN M. CALZACORTA regulations as applied to any tax-exempt group under Section 501(c). Schwabe, Williamson & Wyatt, PC JAMES H. DENHAM ATI Wah Chang AOI is a member of the U.S. Chamber of Commerce, which has separately KEVIN B. DULL submitted detailed comments describing the ways in which the proposed rule Kaiser Permanente ROBERT T. FRERES, JR. would run afoul of the Constitution, exceed the legal authority that Congress has Freres Lumber Co. Inc. granted to the agencies, and create an irrational and unworkable regulatory DAN D. HARMON Hoffman Corporation structure. We share the U.S. Chamber’s numerous concerns, and we write SCOTT A. HIBBS separately to emphasize two points. The Standard JACK ISSELMANN The Greenbrier Companies First, the IRS has neither the expertise nor the statutory authority to act as a PATRICK C. McCORMICK * AM:PM PR, LLC regulator or censor of local, state, and federal political speech. The lesson to be GREGORY A. MILLER * drawn from the IRS’s inappropriate targeting of conservative groups last election Weyerhaeuser Company WILLIAM O. NICHOLSON cycle (and other past partisan abuses of the tax authorities) is not that the IRS Portland General Electric JON V. OWENS should do more to curtail constitutionally protected political speech. Rather, the ESCO Corporation lesson is that the IRS should scrupulously avoid using its tax collecting powers SCOTT N. PARRISH * A-dec, Inc. as a tool of partisan advantage by restricting or chilling legitimate speech TIMOTHY C. PHILLIPS activities by tax-exempt organizations. The First Amendment requires that the Phillips & Company SUSAN B. REED IRS address its past mistakes by adopting a more permissive standard for CenturyLink political speech, not a more restrictive one. The proposed rulemaking would C. JEANNE STATON Staton Companies compound the mistakes of the past by plunging the IRS deeper into the highly- ALAN J. THAYER, JR. * charged territory of campaign finance law, an area that is within the exclusive Innovative Law Group DANIEL C. THORNDIKE * domain of other regulators, namely the Federal Election Commission. Medford Fabrication *District Vice Chair Uniting Oregon Business John A. Koskinen Commissioner of Internal Revenue RE: Comments on IRS NPRM, REG-134417-13 February 26, 2014 Page 2 Second, as other commenters have pointed out, the definition of “Candidate Related Political Activity” is so broad that it would capture many activities that chambers of commerce routinely engage in – indeed, it would capture activities that go to the very core of our organizations’ missions. We are not organized primarily for the purpose of supporting or opposing candidates or appointees, but sometimes policy advocacy that refers to these individuals may be the most effective way of advancing our members’ interests and the common business interests of our communities. Yet under the proposed regulation, such activity could implicate our tax status. Incredibly, the proposed regulation could even threaten our ability to publicly encourage incumbents to take action on things such as pending legislation, if an election were near. This is a critically important function of chambers of commerce that is undoubtedly consistent with our tax-exempt purpose – the proposed regulation’s attempt to say otherwise is inconsistent with statute and longstanding practice and a violation of the Constitution under established judicial precedents. The kinds of activities that would be covered by the proposed regulation can and do advance the tax-exempt purposes of organizations formed under Section 501(c) of the tax code. An organization should not be forced to choose between these legitimate activities and maintaining its tax status, which is precisely what this proposed rule could do. The proposal should be withdrawn in its entirety. Regards, Jay M. Clemens President & CEO .
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