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IRS postpones hearing on draft nonprofit rules until after revisions

The Internal Revenue Service said Thursday that it will delay a public hearing it planned to hold this summer before revising the controversial regulations it proposed last year to govern the political activities of tax-exempt groups.

The agency plans to postpone the hearing until after it reworks the proposed guidelines, which groups on both sides of the political spectrum have criticized. The agency received more than 150,000 comments before the first public-input phase ended in February.

“Given the diversity of views expressed and the volume of substantive input, we have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation,” the IRS said.

The regulations proposed last year would prohibit tax-exempt groups from engaging in election-related activities, including voter-registration and get-out-the-vote drives.

Conservatives have argued that the draft guidelines are part of an Obama administration attempt to silence critics on the right, while liberals have said the plans simply go too far and need reworking.

Despite pressure from the right to scrap the rule-making plans, IRS Commissioner John Koskinen said last month that he would forge ahead. He also said the IRS and Treasury Department would likely rewrite the draft nonprofit guidelines and hold a hearing on the matter this summer.

“My bottom line is that it’s in everyone’s interest to have clarification,” Koskinen said in a Washington Post interview. “My position since I started more than four months ago is that we ought to have clarity, and that any rule that comes out ought to be fair and easy to administer.”

The IRS developed the proposals after an inspector general’s report last year revealed the agency had targeted nonprofit advocacy groups for extra scrutiny based on their names and policy positions.

The agency has said its problematic screening activities started in part because of confusion over how much political activity is allowed for the organizations under current IRS regulations.

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