[Congressional Record (Bound Edition), Volume 161 (2015), Part 4]
[House]
[Pages 5052-5054]
[From the U.S. 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).

[[Page 5053]]


  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.
  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.

[[Page 5054]]

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.

                          ____________________