The Internal Revenue Service (IRS) has announced the release of the redesigned Form 990, the form that public charities and other tax-exempt organizations are required to file annually. The new form will be used for the 2008 tax year starting in 2009 and will be phased in over a three year period for smaller organizations. Many changes have been made since a draft was released after the IRS received more than 650 public comments.

The IRS press release states; "For the 2008 tax year (returns filed in 2009), organizations with gross receipts over $1.0 million or total assets over $2.5 million will be required to file the Form 990. For the 2009 tax year (returns filed in 2010), organizations with gross receipts over $500,000 or total assets over $1.25 million will be required to file the Form 990. The filing thresholds will be set permanently at $200,000 gross receipts and $500,000 total assets beginning with the 2010 tax year. Also, starting with the 2010 tax year, the IRS will increase the filing threshold for organizations required to file Form 990-N (the e-postcard) from $25,000 to $50,000.

In regards to Schedule C on political campaign and lobbying activity, the same concerns OMB Watch discussed in its comments remain.

The 2008 Form 990 and other background materials are available on the IRS Charities and Nonprofits Web site.

The Hill and the Washington Post report that Democrats on the House Special Task Force on Ethics Enforcement support the creation of an independent panel to review ethics complaints and make recommendations to the House ethics committee. The "Office of Congressional Ethics" would consist of six members jointly appointed by the speaker and minority leader who would serve four-year terms and be served by a nonpartisan professional staff. Current lawmakers and lobbyists would not be able to be on the panel. The panel would first conduct preliminary reviews of complaints and then conduct a second phase review of the ones it finds most serious for referral to the House Ethics Committee. The cases referred to the Ethics Committee would have to be considered within 45 calendar or five legislative days followed by a public statement or finding of its verdict.

As the 2008 election nears, the Internal Revenue Service (IRS) will reportedly contact and educate groups about the limits on political activity. As the press calls in a warning about nonprofits' (501(c)(4)'s) involvement in elections, the IRS has responded. According to BNA Money and Politics; ($$)

Lois Lerner, IRS's exempt organizations director, said in a news briefing that the new look at compliance by organizations exempt under tax code Section 501(c)(4) would be in addition to an ongoing program to assure compliance by Section 501(c)(3) charitable organizations. Lerner noted that there are major differences in the rules for the two types of groups. The 501(c)(4) entities, known generally as "social welfare" organizations, are allowed to be involved in political campaigns, as long as it is not their "primary purpose."

The IRS also plans on looking at direct contributions to political candidates, which 501(c)(3) charities are prohibited from doing. To read the 2008 IRS "implementing guidelines" for exempt organizations, click here.

The Federal Election Commission (FEC) is expected to finalize the new rule for funding "electioneering communications" upon approving the explanatory text known as the explanation and justification (E&J). The E&J gives some examples of the types of ads that corporations may or may not sponsor.

There are a few problems with this E&J. As Bob Bauer writes in a blog posting; "What more can be said if, after the explanation, the Commission's course of interpretation is no more predictable than before? Under the rule, an ad may include "indicia of express advocacy" (references to candidates, elections or voting), or it might not: either way, it might be exempt or it might not."

According to BNA Money and Politics, ($$) "The first electioneering-communications report for the current presidential campaign came from the Club for Growth.net, which told the FEC that it received new funding for its television ads targeting Republican presidential candidate Huckabee."

Meanwhile Citizens United has announced that it has filed a lawsuit against the FEC, arguing that issue-oriented television ads are protected by the First Amendment and should not be subject to disclosure requirements. Remember, the disclosure requirements were not addressed in the Wisconsin Right to Life case, and even though one of the FEC's alternatives in the proposed rulemaking removed disclosure, the final rule left the requirements intact. The lawsuit focuses on ads the group plans to air for a film about Senator Hillary Clinton (D-NY).

The Senate Ethics Committee has released new guidelines on Senate travel rules in accordance with the Honest Leadership and Open Government Act. According to BNA Money and Politics ($$);

the Senate allows any charitable organization that is tax-exempt under Section 501(c)(3) of the tax code to offer to pay for fact-finding trips for senators and Senate staff, even if the organization has lobbyists. In the House, only educational institutions can sponsor trips regardless of whether they have lobbyists. For-profit companies and other organizations that hire lobbyists generally are banned from sponsoring long fact-finding trips under both the House's and Senate's new rules. These entities are allowed only to sponsor trips that include single-day, official events, such as a speech or conference, with a possible overnight stay of one or two nights before and after the event.

Both the House and Senate travel rules prohibit privately sponsored travel for recreational purposes, and lobbyists' participation in travel, and both also require pre-approval of privately sponsored travel from their ethics committee.

Nonprofit groups created to educate the public and lobby on issues have started inserting themselves into the presidential primaries, adding an unexpected wild card to wide-open elections in both parties. The groups provide a new avenue for routing millions of dollars into an election cycle already awash with spending by traditional political organizations.

This Washington Post article continues by condemning 501(c)(4) organizations that are prevalent in primary campaigns in Iowa and New Hampshire, warning that such activity could increase in the future and that the groups should, "proceed with caution." However, the public is not likely to understand that, with "nonprofit" in the headline, they are talking about 501(c)(4) organizations. Most will infer that nonprofits are becoming too involved in the campaigns and there is something wrong with this. The ramifications of the Washington Post article are uncertain, but confusion can lead to overreaction by regulators and cause use the public to question the work of legitimate nonprofits during an election.

The Post article states; "The nonprofits are competing with the campaigns for voter attention, especially in early-voting states such as Iowa and New Hampshire, and their advertising, phone calls and mailings could help diffuse the candidates' own messages." What about the many nonprofits that are competing for the candidates' attention? One example in the article illustrates why issue groups use campaigns to get attention for an issue. Friends of the Earth Action criticized Sen. Hillary Clinton's inaction on global warming issues. Their ads asked the public to call Clinton and "tell her we've had enough of corporate polluters and billion-dollar giveaways." Now Clinton has proposed two amendments to a bill to address their concerns.

With the Internal Revenue Service (IRS) "on the lookout," 501(c)(4)s will have to be able to show their primary purpose is not to influence the outcome of elections. But there is plenty of constructive work to be done. Countless nonprofit advocacy groups continue to make a beneficial contribution to the election process, such as by helping to conduct voter registration drives and sponsoring candidate debates and forums.

The work of advocacy organizations during an election strengthens a very necessary, diverse dialogue on important issues. An example mentioned here before, is the Primary Project. This blog post from the Alliance for Justice gets it; "It is my strong belief that we as a society benefit from the discourse of a variety of voices in an election year—to which I say to my nonprofit friends, let me hear you now." And this San Francisco Chronicle editorial highlights another great example, the Heartland Presidential Forum organized by the Center for Community Change, Iowa Citizens for Community Improvement, and hundreds of grassroots groups around the country. "The organizations hosting the forum understand this - they are community groups whose bread and butter is the patient one-on-one relationship-building that builds movements, and they see elections as but a moment in a long process of social change. But moments count.