February 26, 2014 REG-134417-13 Room 5205, Internal Revenue Service P.O.

Box 7604, Ben Franklin Station Washington, DC 20044 Submitted via www.regulations.gov Re: AAUW and AAUW Action Fund comments on Notice of Proposed Rulemaking, Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities, REG-134417-13 On behalf of the more than 170,000 members and supporters of the American Association of University Women (AAUW) and the AAUW Action Fund, we are pleased to share comments in response to the Notice of Proposed Rulemaking (NPRM) on Guidance for TaxExempt Social Welfare Organizations on Candidate-Related Political Activities. While we appreciate the stated goal of the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) of providing greater clarity surrounding permissible political activities by nonprofit organizations, we cannot support the NPRM as written. We request that Treasury and the IRS revise the proposed regulation in consultation with the regulated community to develop a better approach. The work of AAUW and the AAUW Action Fund builds upon more than 130 years of responsible public participation. Since 1881, AAUW has been the nations leading voice promoting education and equity for women and girls. The AAUW Action Fund supports AAUWs continuing goal of breaking through barriers for women and girls, and it does so through member activism and voter mobilization. AAUW is a public charity exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (the Code), and AAUW Action Fund is a social welfare organization exempt under Section 501(c)(4) of the Code. In addition to the national organizations, there are more than 1000 AAUW-affiliated organizations nationwide, most of which are 501(c)(4) social welfare organizations. Together, we are committed to advocating for discussion to ensure enlightened decisions on public policy.1 As a matter of longstanding organizational policies, neither AAUW, nor the AAUW Action Fund, nor the AAUW-affiliated entities endorse or contribute to candidates or engage in partisan political activities. We welcome this rulemaking effort to provide, at last, clear guidance to tax-exempt organizations about what constitutes political activity. Under the current system of determining whether a particular activity is deemed political campaign intervention based on IRS review of all of the facts and circumstances, neither regulated organizations
1

AAUW. (2013). AAUW Public Policy Program, 2013-15. www.aauw.org/resource/principles-and-priorities/

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nor, apparently, IRS staff know for certain what is and isnt political.2 The Supreme Court has said that a law is void for vagueness if it is so vague that men of common intelligence must necessarily guess at its meaning.3 While AAUW would not presume to speak for men of common intelligence, we are in a position to tell the IRS that women of uncommon intelligence find its current rules to be incomprehensible. Yet the definitions of candidate-related political activity (CRPA) offered by the NPRM is not an acceptable solution. Although our organizations entirely refrain from partisan political work, our important nonpartisan work to strengthen democracy would be limited or eliminated under the proposed rule, particularly if that rule were expanded to cover additional categories of nonprofit organizations, as the NPRM suggests is under consideration. The NPRM overreaches by capturing as CRPA certain activities without considering if they are conducted on a partisan or nonpartisan basis and in many cases without adding clarity. If adopted, the proposed regulations would reclassify as CRPA much of the civic engagement work that 501(c)(4) organizations conduct during election season, such as promoting participation in elections, strengthening democracy by educating voters, and educating candidates about important issues of concern to their constituents and communities. The NPRM would limit how much of this activitywhich has long been recognized by the IRS as promoting the general welfare of the community501(c)(4)s can do. For instance, we are troubled that activities such as the following are defined as CRPA: Voter registration and get-out-the-vote (GOTV) activities: The NPRM would classify as CRPA all voter registration and GOTV activities. This will limit the ability of social welfare organizations to work within their communities to support civic engagement in a nonpartisan manner. The AAUW Action Fund has long coordinated with other nonpartisan organizations to provide support to and reach citizens who are often left out of, or marginalized during, elections. Hosting nonpartisan candidate events: Any event within 30 days of a primary or 60 days of a general election would be considered CRPA if one or more candidates in such election appear as part of the programeven nonpartisan candidate debates or events at which a candidate appears in a non-candidate capacity. The AAUW Action Fund strives to be nonpartisan and has identified strategies to include all candidates in forums and to facilitate interactions between public officials and their

See Treasury Inspector General for Tax Administration, Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review (Reference Number: 2013-10-053), (noting determination staff difficulty evaluating applications for recognition of tax-exempt status from groups apparently engaged in political activity and recommending guidance on what constitutes political campaign intervention, as well as guidance on how much of such activity 501(c)(4) organizations could do under the primary purpose test and related matters). 3 Connally v. General Construction Co., 269 U.S. 385, 391 (1926).
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constituents, which would be limited under the NPRM. The proposed rule would limit the AAUW Action Funds ability to facilitate these nonpartisan interactions. In some communities the AAUW Action Fund is the only organization that works to coordinate these types of interactions, and it would be a disservice to see them stifled under an overreaching rule. Public communications prior to elections: Any public communication (as broadly defined in the NPRM) disseminated within 30 days of a primary or 60 days of a general election that refers to one or more clearly identified candidates in that election will be treated as CRPA. This is true even if the candidate is referenced in a non-candidate capacity or if the communication was originally made long before the election but remains available (e.g. on the organizations website). Treating these communications as CRPA will limit the ability of 501(c)(4)s to communicate on many policy-related issues in various communications, including websites, newspapers, magazines, and advertising. The NPRM abandons the distinctions between political activities and legitimate policy advocacy communications the IRS adopted in earlier rulings. Our organizations ability to advocate on longstanding policy priorities that are central to our missions should not be limited by the decisions of governing bodies to schedule votes, hearings, or other action in proximity to elections. The NPRM would do just that. Grants and transfers to 501(c) organizations: The NPRM considers as CRPA any gift, grant, subscription, loan, advance, or deposit of money or anything of value to any organization described in 501(c) that engages in CRPA, unless the contributor obtains a written statement that the grantee does not engage in CRPA and the contribution is subject to a written restriction that it not be used for CRPA. This proposal new restrictions could significantly deter legitimate social welfare activities by 501(c)(4) organizations. For example, the NPRM would deter many 501(c)(4)s from transferring funds to 501(c)(3) organizations that are prohibited from intervening in campaigns for public office yet are engaging in nonpartisan, charitable activities that would be considered CRPA for 501(c)(4)s. Likewise, the proposal would treat as CRPA any grant to a 501(c) that engages in partisan activities, even if the use of the grant was restricted to nonpartisan educational activities and the terms of the grant explicitly prohibited any direct or indirect use of the funds for political activities.

In addition to the substantive problems with the definition of CRPA, the conflicting definitions for political activities for 501(c)(3) and 501(c)(4) organizations that the proposed rule would create would create a huge administrative burden for AAUW and the AAUW Action Fund and create a significant risk of inadvertent violations. Like many related 501(c)(3) and 501(c)(4) organizations, AAUW and AAUW Action Fund share staff, and each staff person would have to be trained in both definitions of political activity to accurately track time spent on work done for AAUW and the AAUW Action Fund, respectively. Having 3

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two sets of definitions of political campaign activity would only lead to misunderstanding in the regulated community, especially among the many small and mid-sized organizations that cannot afford to retain legal counsel, including many AAUW-affiliated organizations and their allied organizations in the community. Defining activities as political for 501(c)(4)s, even if that definition is not intended to apply to 501(c)(3)s, will lead riskaverse charities (and their funders) to become fearful of conducting nonpartisan voter registration, GOTV, and other activities newly defined as CRPA. Given the significant concerns we have about the overbroad definition of CRPA the NPRM propose, we do not support applying the new definition to 501(c)(3)s. Rather, we urge Treasury and the IRS to revise the proposed regulation in consultation with the regulated community to develop a better approach and then to issue a new NPRM to seek comment on the revised rule. Thank you for the opportunity to submit comments on this important issue. We look forward to working with you to improve womens economic opportunities. If you have any questions, please feel free to contact Linda Hallman, executive director, at 202-785-7788, or Lisa Maatz, vice president of government relations, at 202-785-7720. Sincerely,

Patricia Fae Ho President, AAUW

Linda D. Hallman Executive Director/CEO, AAUW