Friday, October 4, 2019

IRS Audit of the NRA's Tax-Exempt Status Requested

In a follow-up to a previous post this week The NRA and Russia:  How a Tax Exempt Organization Became a Foreign Asset, Senate Minority Leader Chuck Schumer and Senate Finance Committee ranking member Ron Wyden called for an IRS examination of the NRA's ongoing tax-exempt status in a October 2nd letter to IRS Commissioner Chuck Rettig.   The request comes on the heels of the Senate Finance Democrats' release last week of a report on the organizations's interactions with Russian nationals.  Schumer and Wyden stated in the letter:  "Given this report's concerning findings and other allegations of potential violations of tax exempt law by the NRA, it is incumbent on the IRS to fully investigate the organization's activities to determine whether the NRA's tax exemption should be disallowed."  

The NRA is a tax-exempt under section 501(c)(4) of the Internal Revenue Code as a social-welfare organization.  The organization also has affiliated entities that are tax-exempt under sections 501(c)(3) and 527 of the Code.

Schumer and Wyden assert in their letter that the findings of the report raise concerns of whether the NRA's activities violated the statutory social welfare requirements, including the use of tax-exempt resources for non-tax-exempt purposes.  "In light of the continued efforts of Russia to undermine American democracy, IRS must use its full authority to prevent foreign adversaries from again exploiting tax-exempt organizations to undermine American interests," Wyden and Schumer wrote.  The NRA and Senate Republicans take issue with the report and its findings.

As we previously blogged, the New York and District of Columbia attorneys general are conducting their own investigations about whether the NRA is complying with state tax laws. 

[Sources:  Politico, The Hill]

Nicholas Mirkay

https://lawprofessors.typepad.com/nonprofit/2019/10/irs-audit-of-nra-requested.html

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