The former head of the IRS’ Exempt Organizations division is calling for an investigation into a conservative nonprofit group of lawmakers and corporate officials on the grounds that they are abusing their tax-exempt status.
Former IRS official Marcus Owens recently filed a complaint against the American Legislative Exchange Council (ALEC) on behalf of Clergy VOICE, a group of Christian ministers in Ohio. Their concerns are based on whistle-blower documents provided to the watchdog group Common Cause suggesting that ALEC’s lawmaker members are essentially stealth lobbyists for corporate interests.
“The information in these materials suggests that ALEC is significantly misrepresenting its activities to the IRS, the states, and the public in order to advance a legislative agenda — an agenda largely crafted by the organization’s corporate members — that elevates corporate gain for a few over the well-being of society’s less fortunate,” Owens wrote.
“ALEC has deliberately and repeatedly failed to comply with some of the most fundamental federal tax requirements applicable to public charities,” he added. “The information in this submission also suggests, quite strongly, that the conduct of ALEC and certain of its representatives violates other civil and criminal tax laws and may violate other federal and state criminal statutes as well.”
ALEC has not responded to the latest accusations but the group has claimed in the past that it maintains its tax-exempt status due to a loophole in the tax code that allows an exemption for organizations conducting “nonpartisan research and analysis.”
ALEC’s embrace of harsh voter ID laws — laws that disproportionately affect poor and minority voters — as well as its pursuit of legislation like “Stand Your Ground” have sent many businesses running as the group’s profile has risen. Most big corporations don’t want to be associated with controversy, and controversies don’t come much larger and more racially charged than the killing of teenager Trayvon Martin earlier this year, in which “Stand Your Ground” was cited by lawyers defending shooter George Zimmerman, Jr.
Common Cause has also filed a complaint with the IRS that seeks “an IRS ruling revoking ALEC’s tax exemption and assessing back taxes and penalties.” The complaint is backed up by 4,000 ALEC emails that purportedly demonstrate that the group’s lobbying efforts have violated the terms of its nonprofit status.
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