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House approves bill to block IRS from limiting political activities of tax-exempt groups

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WASHINGTON - Fighting back against what they call unfair targeting of conservatives, House Republicans on Wednesday voted to delay efforts by the Obama administration to further restrict political activities of groups claiming tax-exempt status.

The GOP bill, approved 243-176, would delay for one year proposed Internal Revenue Service regulations developed in the wake of disclosures last year that the IRS had focused extra scrutiny on non-profit groups — including those claiming a tea party connection — before the 2010 and 2012 elections.

The White House has said President Barack Obama's top advisers will urge him to veto the bill if it reaches his desk, although majority Democrats in the Senate are expected to prevent it from getting a vote there.

The lack of clarity under the current standards "has resulted in confusion and difficulty administering the (tax) code, as well as delays in the processing of applications for tax-exempt status," the White House said.

House Ways and Means Committee Chairman Dave Camp, R-Mich., said the new IRS rules were a blatant attempt "to legalize and institutionalize targeting" of tea party and other groups. Civil liberties and environmental groups have also objected to the proposed regulations.

The House bill would "put a hold" on the proposed rules until Congress and the Treasury Department's inspector general complete their investigations of the scandal, in which the acting IRS commissioner and several other officials in the agency lost their jobs.

Meanwhile, the House Oversight and Government Reform Committee announced it is recalling Lois Lerner, the former IRS official at the centre of the tea party controversy, to testify again next week.

Before her retirement last year, Lerner had headed the IRS division that handles applications for tax-exempt status and was the first person in the agency to publicly admit agents had improperly targeted tea party groups for extra scrutiny after several complained to Republicans in Congress.

Appearing before the committee last spring, Lerner made brief remarks denying any wrongdoing but then invoked a Fifth Amendment protection against self-incrimination to refuse answering any of the panel's questions.

After the Supreme Court's 2010 Citizens United decision allowing unfettered political spending by companies and unions, campaign expenditures by social welfare groups mushroomed. Between the 2008 and 2012 elections, it tripled to $254 million, according to the nonpartisan Center for Responsive Politics.

In November, Treasury and the Internal Revenue Service issued draft regulations that would limit the political activities of such groups that fall under section 501(c)4 of the tax code. The proposed regulations have attracted more than 98,000 public comments — a record, according to the IRS.

Republicans accused the Obama administration of trying to legalize the targeting of conservative groups. "This is a government that is seeking to silence the voices of groups that disagree with them," said Rep. Kevin Brady, R-Texas.

Democrats said the bill is little more than an election-year ploy by Republicans to rally the party base. They note that final regulations probably wouldn't be issued for at least a year, anyway.

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Follow Matthew Daly on Twitter: https://twitter.com/MatthewDalyWDC

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