Tag Archives: tax exempt status

The NRA is a Huge Swamp Creature


New Orleans   The National Rifle Association or NRA is rarely confused with anything that would seem soft and fuzzy given its hard edge, take-no-prisoners, win-at-all-costs attitude about anything that might even vaguely resemble gun control.  When President Trump speaks of cleaning up the Washington DC swamp of lobbying and influence peddling, he pretty much has his hands behind his back and his fingers crossed, but if he were serious, the NRA is proving that it is a huge swamp creature.

They are now being investigated on a number of fronts, most seriously by Leticia James, New York State’s attorney general and the former Public Advocate in New York City.  James believes that their incessant lobbying and political work might disqualify them from enjoying a tax exemption.  A former head of the IRS Tax Exemption Section was quoted in the New York Times saying that “The N.R.A. is willing to play fast and loose with tax regulations,” indicating that there is likely fire underneath all of this smoke.

So, what’s up?  Well, it’s not the usual pro-gun, anti-gun thing.  It’s something way more stinky, according to current reporting.

On one hand its internal conflict at the board level of the NRA, and they are giving information directly to the New York Times.  Yes, I know this sounds like fake news, but none of this is anonymous.

Partly it has to do with the NRA’s top brass going way overboard and linking hands with the screaming banshee part of the rightwing.  A weird television enterprise called, not surprisingly, NRATV, which has been involved in flat out hate-mongering via their wild-eyed spokeswoman, Dana Loesch.   She ran a children’s show with KKK hoods, and quoting the Times, she referred to

gun-control advocates as “tragedy-dry-humping whores” and vowing to combat the left with what she called the “clenched fist of truth” — a body part that the comedian John Oliver said was located “a little past the bent elbow of nonsense.” In one video, she warned The Times, “We’re coming for you”; in another, she threatened to burn a copy of the newspaper.

Guns or no guns, let’s agree, that’s some wild over the top stuff!  Even Wayne LaPierre, the NRA EVP and master of their aggressive strategy was supposedly “livid” and “embarrassed” by this stuff on their channel, and he is never embarrassed, even by mass shootings of children!

On the other hand, there seems to be a pile of self-dealing and personal enrichment within the NRA as well.  The Ackerman McQueen ad and PR firm that has been flacking for the NRA for decades and receiving millions and millions by the boatload has also given work to relatives and LaPierre’s wife through subcontractors.  Board members are unsettled by all of this as well, and

…have also expressed concern about the size of payments to the ad firm that produces NRATV, Ackerman McQueen. The firm and its affiliates pocketed $40 million from the N.R.A. in 2017; billings directly to Ackerman have increased nearly 50 percent since 2015.

There’s an old saying about bullies that if you slap back, that run screaming.  The bullies of the NRA may be about to take exactly that kind of whipping.


Nonprofits May Be Able to Go Politically Wild Thanks to House Republicans

New Orleans   The “law of unintended consequences” is not one that was passed by the US House of Representatives and its far right, ideological Republican majority, but it is certainly one that they might soon learn at their peril.

One of the many hidden time bombs in their recent tax bill, now heading towards conference with the Senate, was originally a repeal of the Johnson Amendment that prohibits tax-exempt charities from political activity. Initially, their amendment was only a wet kiss to the heavy breathers in their religious base who wanted a special exemption to practice politics from the pulpit. Not to be outdone – the final version of the House bill instead opens a political floodgate for charities to go wild. Their bill says that any tax-exempt charity can boost or bust political candidates if “the preparation and presentation of such content” is “in the ordinary course of the organization’s regular and customary activities” and does not result in more than de minimis incremental expenses.” (thanks to Ellen P. Aprill a tax law professor at Loyola Law School who read and reported the language!)

So, sure, that would cover preaching, because there’s no cost in adding an endorsement into a sermon, but it would also cover a world of other things that fit fully into a nebulous “de minimis” standard like a banner across a website’s home page, constant Twitter and Facebook posts, and endless email blasts all of which have virtually no cost. Remember as well that these standards are all set and monitored by the Internal Revenue Service, which to date, since the passage of the Johnson Amendment, has never clarified the existing standard of what might be permissible political activity, leaving the matter to institutional restraint and lawyer empowering, as one outfit after another takes a stab at a number, whether less than 5% or 8% or zero. Remember also that because of that the penalties are also somewhere between nil and a hand slap. President Trump’s own foundation was caught in this mess, as you may also remember, when he used the foundation’s funds to make several political contributions at the 5-figure levels, all of which he remedied by repaying the foundation. There was never a question about whether he was going to surrender the tax exemption of his foundation and certainly no evidence that the IRS was threatening to take it away. Without the thin shield of the Johnson Amendment, there will be no practical limits to what nonprofits might be able to do.

The Republican House may think more activism from the pulpit makes it all worthwhile, but they aren’t the only nonprofits who can jump into the partisan playgrounds. Take nonprofit hospitals for example, which still make up almost 60% of hospitals. A list of the top six systems from Ascension to Kaiser in the Wall Street Journal indicated they were turning over $158.5 billion dollars annually. Hospitals were pretty united in their opposition to the Republican efforts to repeal the Affordable Care Act, and will be even more committed to any cutbacks in Medicaid or Medicare. If “de minimis” was 5%, they could spent almost $8 billion, but even dropping notices in every bill or banners on every sign-up for your medical records online now would certainly get the message out. It would also cost just the same for doctors and nurses to whisper in patients’ ears as it cost for the pastor to slip an endorsement in a prayer.

Churches are shrinking while many other parts of the nonprofit sector, like healthcare, are soaring. The Republican House might should get on their knees and offer something up to the Republican Senate to save them from this repeal before the law of unintended consequences makes them give more than they hope to receive.