This is the Cato Daily Podcast for Tuesday, March 11, 2014.

I'm Caleb Brown.

Proposed rules by the IRS would chill a great deal of speech

from some of the most respected activist groups in the United States.

It's hard to find someone to defend the new rules governing 501c4 organizations.

David Keating, president of the Center for Competitive Politics, argues the job of deciding what speech is allowed

and what isn't shouldn't fall to the IRS.

Well the IRS is what they've technically proposed is called a notice of proposed rulemaking.

NPRM, the lawyers like to say.

And what the IRS has done is proposed a new set of rules to guide

what is the definition of political activity

under the Internal Revenue Code. And not surprisingly, given how they define

political activity, that's caused a firestorm of opposition.

You not only see average people responding, but you see organizations that span the political spectrum from labor unions to

progressive groups to Tea Party groups to think tanks to the Center for

Competitive Politics and the Institute for Justice among others. Center for

justice among others. So everyone is thinks the IRS has gone way too far in

defining what counts as political activity. This is something that the IRS has, if I understand the law correctly, no jurisdiction.

If we think of what the FEC is supposed to do, how does the IRS get the ability to dictate what is this political speech?

Well, I mean that's a great question that what the IRS would say is Congress passed the Internal Revenue Code.

They set up a portion of the code governing tax-exempt

tax-exempt organizations and there's many different types of tax-exempt

...