[Congressional Record Volume 161, Number 54 (Wednesday, April 15, 2015)]
[House]
[Pages H2235-H2236]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENSURING TAX EXEMPT ORGANIZATIONS THE RIGHT TO APPEAL ACT
Mr. RYAN of Wisconsin. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 1314) to amend the Internal Revenue Code of 1986 to
provide for a right to an administrative appeal relating to adverse
determinations of tax-exempt status of certain organizations, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1314
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ensuring Tax Exempt
Organizations the Right to Appeal Act''.
SEC. 2. ADMINISTRATIVE APPEAL RELATING TO ADVERSE
DETERMINATIONS OF TAX-EXEMPT STATUS OF CERTAIN
ORGANIZATIONS.
(a) In General.--Section 7123 of the Internal Revenue Code
of 1986 is amended by adding at the end of the following:
``(c) Administrative Appeal Relating to Adverse
Determination of Tax-Exempt Status of Certain
Organizations.--
``(1) In general.--The Secretary shall prescribe procedures
under which an organization which claims to be described in
section 501(c) may request an administrative appeal
(including a conference relating to such appeal if requested
by the organization) to the Internal Revenue Service Office
of Appeals of an adverse determination described in paragraph
(2).
``(2) Adverse determinations.--For purposes of paragraph
(1), an adverse determination is described in this paragraph
if such determination is adverse to an organization with
respect to--
``(A) the initial qualification or continuing qualification
of the organization as exempt from tax under section 501(a)
or as an organization described in section 170(c)(2),
``(B) the initial classification or continuing
classification of the organization as a private foundation
under section 509(a), or
``(C) the initial classification or continuing
classification of the organization as a private operating
foundation under section 4942(j)(3).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to determinations made on or after May 19, 2014.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Ryan) and the gentleman from Georgia (Mr. Lewis) each
will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin.
General Leave
Mr. RYAN of Wisconsin. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 1314, currently
under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may
consume.
I thank the gentleman from Pennsylvania (Mr. Meehan) for his work in
crafting this legislation and for bringing it to the floor. This, too,
is one of the important things that we needed to do to restore some
trust and confidence and accountability at the Internal Revenue
Service.
For the purpose of describing the legislation, I yield such time as
he may consume to the gentleman from Pennsylvania (Mr. Meehan).
Mr. MEEHAN. I thank the chairman for his recognition and support of
this very, very--once again--thematically important bill.
Mr. Speaker, I rise today in support of what is commonsense
legislation, H.R. 1314. What it does is gives tax-exempt status
applicants whose application is denied the right to appeal that
decision. That seems fundamental, doesn't it, in a country likes ours,
where the Constitution built within it the concept of the right to
petition your government for the decisions that they make.
The purpose of the legislation is simple. What it will do is codify
in statute the requirement for the IRS to create a mechanism by which
501(c) organizations--tax-exempt organizations--if they get an adverse
determination of their tax-exempt status, they can request an
administrative appeal to the agency's internal Office of Appeals.
My colleague from Illinois talked about the concept here of impunity.
To me, this is a lot of what this speaks to. The idea that an
administrative agency--in this case, the IRS--will take this
application and then would make a decision--it was because of the good
work that was done in the previous Congress by this committee and the
Oversight Subcommittee of this committee, that they exposed the reality
that, in many cases, these particular appeals, these particular
decisions, were being made after the applicant was being targeted
because of the fact that they had chosen to express particular
political views in the context of their application.
What was done was that those applications, once denied, were diverted
to a different part of the structure in which they went to die. That
made the IRS the judge; the jury; and, in fact, the executioner because
you were done with respect to your application. There was no place else
to go.
Now, I have to say that, when this came to light because of the work
of this committee, the IRS did issue interim guidance in May 2014 that
ensured that all groups subject to a denial would have the right to
appeal the decision.
This bill today, H.R. 1314, codifies that guidance into law so there
is no ambiguity and that, once again, we don't have the ability of the
IRS to indiscriminately and sua sponte make their own decisions about
when American taxpayers should have the right to be able to petition
for an appeal of an adverse decision.
Mr. Speaker, I will enter in the Record a letter from the Small
Business and Entrepreneurship Council which supports the legislation.
The group writes: ``H.R. 1314 is an important bill as it allows
taxpayers an additional right to petition their government when they
disagree with a decision.''
That is the fundamental challenge that we have to the impunity which
has been taking place.
Small Business and
Entrepreneurship Council,
Vienna, VA, April 13, 2015.
Hon. Pat Meehan,
Cannon Building,
Washington, DC.
Dear Representative Meehan: The Small Business and
Entrepreneurship Council is pleased to support H.R. 1314, a
bill that would allow for an appeals process for those
organizations that are denied tax-exempt status by the
Internal Revenue Service (IRS).
H.R. 1314 is an important bill as it allows taxpayers an
additional right to petition their government when they
disagree with a decision by the IRS to deny tax-exempt
status. Given the clear and well-documented bias by IRS staff
that thwarted and delayed the approval of organizations based
on their ideology, more accountability and protection for
taxpayers is needed. H.R. 1314 provides that check.
Thank you for your leadership on this important issue.
Sincerely,
Karen Kerrigan,
President & CEO.
Mr. MEEHAN. I urge my colleagues, as they have on our subcommittee
and our committee with their unanimous support from both sides of the
aisle, to support this commonsense taxpayer protection and to send an
unmistakable signal to the American taxpayers that they should not be
targeted by the IRS for their political views.
Mr. LEWIS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 1314. Currently, not all
501(c) organizations are able to appeal decisions regarding the
application for tax-exempt status; instead, the right to appeal depends
on whether the application was processed inside the Internal Revenue
Service.
This bill would give the right of an administrative appeal to all
organizations that apply for tax-exempt status. It is a good,
commonsense bill. I urge all of my colleagues on both sides of the
aisle to vote ``yes'' on H.R. 1314, and I thank the chair of our full
committee and the sponsor of this bill.
I reserve the balance of my time.
Mr. RYAN of Wisconsin. I thank the gentleman from Georgia as well for
his comments.
Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr.
Roskam), the chairman of the subcommittee.
[[Page H2236]]
Mr. ROSKAM. Mr. Speaker, I thank the chairman for yielding.
This is a classic example of the IRS basically putting the American
taxpayers in a nice little cul de sac. They would come in; you would
have a process, and they would review something and so forth and so on.
Then rather than moving you through where you could get a
disposition, rather than moving you through to where you could get an
answer, rather than moving you through so you knew that there was
somebody unbiased that was looking at something, they essentially moved
you into a cul de sac and just kind of let you walk around the
neighborhood for a while and not particularly caring about the
disposition of this.
{time} 1430
I want to say, Mr. Speaker, these bills that we are discussing today,
many of them were authored and have been highlighted and brainstormed
by Dr. Charles Boustany, the former chairman of the Oversight
Subcommittee. And now, on a bipartisan basis, folks have come together.
So I want to congratulate Mr. Meehan for the procedure by which this
has now been expedited and the expectation that people will be fairly
considered and fairly reviewed and that they won't be stuck in a cul-
de-sac with no way out.
Mr. LEWIS. Mr. Speaker, I yield back the balance of my time.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield the balance of my time to
the gentleman from Pennsylvania (Mr. Meehan) for the purpose of
closing.
Mr. MEEHAN. Mr. Speaker, I think the point has been made very
articulately by all of the speakers who have talked about what really
is a fundamental and simple issue, which is the right to appeal to your
government.
What concerned me the most when we began to look at what occurred
with the IRS conduct in the context of the applications by the
organizations which were denied based on their perceived political
views or religious views, that the process for these particular
applicants was changed; that it went to a different division, where, as
my colleague from Illinois identified, it went to die in the cul-de-
sac.
So this is a question of fundamental fairness, that every American
taxpayer should have the right to be treated equally. That is all we
are asking for here, fundamental, equal treatment, and the right, when
you disagree with the decision by an IRS administrative official, to
have somebody else question that decision.
That is fundamental. It is simple. It is basic American, and I am
very proud that we have colleagues from both sides of the aisle who
have joined together to petition to assure that that right is codified
into law. That is what we accomplish today.
I am grateful for the support of all of my colleagues and the
leadership of the chairman of the subcommittee, who has been helping to
bring to light these abuses. I urge my colleagues to support the
legislation.
Mr. RYAN of Wisconsin. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Wisconsin (Mr. Ryan) that the House suspend the rules
and pass the bill, H.R. 1314, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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