Truthout: ALEC Accused of Violating Its Tax-Exempt Status; Will the IRS Take Action?

-By Jason Leopold

July 5, 2012- Will the Internal Revenue Service (IRS) launch an investigation into the American Legislative Exchange Council (ALEC), the corporate-backed "nonpartisan" "stealth business lobbyist" group that has been accused of flouting civil and criminal tax laws?

That's the obvious question to ask after a prominent Washington, DC-based tax attorney, acting at the behest of one of his clients, sent the IRS a 30-page complaint two weeks ago, following a months-long exhaustive study of ALEC's tax filings, expenditures and public reports about its political activities. The study contained dozens of new examples of how ALEC, whose board is made up entirely of Republican lawmakers, has violated its tax-exempt status.

ALEC has claimed on its annual tax filings with the IRS that it has not engaged in lobbying activities, but publicly boasts that it has helped write and enact at least 1,000 pieces of legislation, such as the controversial "Stand Your Ground" law, used as a defense in the shooting death of Florida teen Trayvon Martin. ALEC's assertion, however, is undercut by the fact that the organization's attorneys, Mark Behrens and Corey Schaecher, registered as lobbyists to represent ALEC in 2008 and 2009, according to North Dakota state records.

ALEC was founded in 1973 in Chicago by state lawmakers and a conservative activist. It is listed as a 501(c)3 tax-exempt organization and, under the IRS code governing 501(c)3's, it is prohibited from influencing legislation "as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates."

"The fact that ALEC provides significant benefits to its corporate donors and Legislative Members is incontrovertible," says the June 18 complaint sent to IRS Commissioner Douglas Shulman on behalf of Clergy VOICE, a group of Christian clergy based in Ohio. "The benefits conferred on either group would alone be sufficient to jeopardize ALEC's tax-exempt status. Moreover, based on the political orientation of the organization's corporate members and its Legislative Members' strong ties to the Republican Party, ALEC's operations appear to benefit one particular segment of the political spectrum. In light of this, it is appropriate – indeed, necessary – for the IRS to investigate ALEC's activities."

An IRS spokeswoman told Truthout earlier this week that the agency does not comment on any investigative actions it may or may not take against an organization or an individual for alleged tax-code violations.

FULL STORY HERE:


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