Washington—The IRS should investigate two Florida dark money groups who, by collectively spending nearly $3 million in political contributions, appear to have made politics by far their primary activity in violation of their tax-exempt status, according to a complaint filed today by Citizens for Responsibility and Ethics in Washington. The two organizations, Foundation for a Safe Environment Inc. and Florida Consumer Awareness Fund, and their chairman also falsely reported on their 2018 tax returns that they did not engage in any political activities and failed to disclose to the IRS the more than a million dollars each contributed to political organizations.
During its 2018 tax year, the Foundation for a Safe Environment Inc. contributed $1,380,970 to political organizations, which accounted for 94.3 percent of its total spending during the year. Similarly, the Florida Consumer Awareness Fund contributed $1,495,000 to political organizations during its 2018 tax year, accounting for 66.3 percent of its total spending that year. While social welfare groups like these are allowed to spend money on elections, it cannot be their primary activity, which is commonly understood to be more than 50 percent of its total spending.
The two groups and their chairman, William Jones, appear to have knowingly misrepresented the groups’ activities and filed false information on their IRS forms. Jones has been listed on the paperwork of more than 85 political committees registered in Florida. According to The Gainesville Sun, political committees associated with Jones and his allies have been used to “funnel money to boost candidates’ chances of winning, while creating a mind-boggling maze of campaign funds that make it near-impossible to trace the initial donor.”
“The law is clear about what tax-exempt organizations that receive tax benefits can and cannot do. Tax-exempt groups that do not disclose donors cannot spend the majority of their money on politics, and attempting to bypass their legal obligations to the IRS threatens to undermine Americans’ rights to fair and transparent elections,” said CREW President Noah Bookbinder. “The IRS should act swiftly to investigate the Foundation for a Safe Environment Inc. and Florida Consumer Awareness Fund, and should it find they violated their tax-exempt status or made false statements on their tax returns, take the appropriate disciplinary action.”
Tax-exempt organizations must report information about their political campaign activity for or against candidates to the IRS. Contributions to political action committees meet the IRS’ definition of political expenditures, which includes “[a]ll activities that support or oppose candidates for elective federal, state, or local public office.”
CREW has previously filed complaints against other 501(c)(4) organizations for failing to report political activity and providing misleading information about their operations to the IRS. In 2019, dark money group Freedom Vote, Inc. paid a penalty to the IRS following a complaint CREW filed in June 2018 alleging that the group was primarily operating in violation of its tax-exempt status to influence political campaigns.
“If the IRS does not hold these dark money groups accountable, it will allow them to continue to abuse their tax status to improperly influence politics and elections,” said Bookbinder. “For far too long, dark money groups have used shady legal loopholes to secretly overshadow the voices and interests of the American public, and it is past time for the IRS to step up enforcement.”