Here is another reply by Greg Colvin, answering the second post here on the topic. Colvin picks up on the last word of the June 5 posting—“intent”—and argues that it is well settled that the IRS does not look into intent when judging political activity. He also defends the liberalizing effect that the proposed rules would have on certain voter education activity.

Greg, it seems, may be overstating his assurances that “intent” is not, as a matter of law, a permissible factor in the test of whether a 501(c)(4) organization is engaged in “political intervention.” This is an important issue for those disinclined to have the federal tax law enforcement agency ferreting out the possible political intent of issue advocacy communications.

Greg Colvin, the Chair of the Bright Lines Project Drafting Committee, has replied to this posting that raised questions about the Project’s proposed revision of the standards for determining tax-exempt political intervention. Colvin concentrates his defense on the retention of a role, which he describes as limited, of the indefinite, poorly understood and variously applied “facts and circumstances” test. Under the Project’s re-definition, he writes, the test is reserved for use on a “limited basis” in a “small number of cases” and is necessary to address “unforeseen situations,” outside the bright lines, that trigger First Amendment concerns. He provides a crisp summary of the Project proposal and argues that, all in all and with a place for “facts and circumstances,” it “would correct the serious absence of neutral, objective criteria…that led to instances of ideological bias in the IRS review of tax-exempt applications.”

No one questions that campaign finance law has struggled through multiple, agonized revisions in distinguishing issues from campaign speech and the discussion of campaign issues from advocacy for candidates or parties. The statute is little help; it speaks of the “purpose of influencing” an election,” 2 U.S.C. §431(8)(A)(i), and broader Commission glosses on the phrase, such as a test for whether a message was “electioneering” in content, eventually came to grief. The Supreme Court held the express advocacy line briefly, then gave in to a conception of the “functional equivalent” of express advocacy, and has since cast much of discussion into obsolescence by extending to corporations the right to make independent expenditures. Now tax policy-makers and tax law face pressure to work through the same issue, in limiting political intervention by 501(c)(4)s, and the results might be expected to be the same.

The Bright Lines Project is a production of experienced tax law specialists seeking a clearer, more predictable test for “political intervention by 501(c)(4) organizations. In a detailed Drafting Committee Explanation, the team (including my partner Ezra Reese) lays out its proposed test and the rationale for it, and additional explanation of their goal appears in an op-ed written by Gary Bass and Beth Kingsley. The Bright Lines Project: Clarifying IRS Rules on Political Intervention (Interim Draft, May 23, 2013). What the Project authors have come up with is constructive and interesting, but this is the key question: does its utility lie in a fruitful application to the tasks the IRS faces, or in showing that even well-reasoned, thoughtful tests will bog the agency down in the political analysis—and therefore political resistance and controversy—that it is or should be trying to escape?

In concluding that the IRS used “inappropriate criteria” in screening tax exempt applications, an Inspector General’s review cites as one source of this mismanagement “confusion” among employees about the law. The report recommends further internal guidance on the nature of an organization’s “primary” activity, and training or workshops designed to educate staff about “ political campaign intervention versus general advocacy.”