Americans for Tax Reform Blue LogoWashington, D.C. – Today, Citizens for Responsibility and Ethics in Washington (CREW) called for the Internal Revenue Service (IRS) to investigate whether Americans for Tax Reform (ATR) and its president Grover Norquist violated federal law by filing a tax return that left out more than half the political activity ATR conducted in 2010.  ATR disclosed more than $4.2 million in independent expenditures to the Federal Election Commission (FEC), but asserted on its 2010 tax return that it spent only $1.85 million on political activities.

“Grover Norquist’s numbers just don’t add up,” said CREW Executive Director Melanie Sloan.  “Americans for Tax Reform spent millions of dollars in 2010 trying to defeat candidates who disagreed with its agenda, then left most of that spending off its own tax return.  Perhaps Mr. Norquist should sign a pledge that he won’t lie to the IRS about his group’s political activity.”

Tax-exempt organizations such as ATR are required to report on their annual tax returns the amount they spent on political activities.  This information helps the IRS determine whether a tax-exempt organization is complying with its tax-exempt status and provides at least some transparency for groups involved in politics.  Reporting inaccurate information can result in civil penalties and criminal prosecution.  CREW previously filed a complaint with the IRS against ATR in 2006.

During the 2010 elections, ATR broadcast a series of television ads explicitly opposing the election of Democrats to Congress, and reported to the FEC it spent $4,218,364 on the ads and other independent expenditures.  By contrast, ATR’s 2010 tax return, signed under penalty of perjury by Mr. Norquist, stated the group spent only $1,859,239 on political activities, and left blank another line for reporting political expenditures.  At most, ATR reported to the IRS only 44 percent of the political spending it disclosed to the FEC.

“Groups like Americans for Tax Reform already don’t have to disclose their donors despite their heavy involvement in elections.  The least we should expect is that they truthfully report their political spending,” added Ms. Sloan.  “Given Mr. Norquist’s well-known interest in the tax system, surely he knew he couldn’t lie on his taxes.  The IRS should investigate immediately.”

Click here to read CREW’s complaint and exhibits to the IRS.

Click here to read the response letter from the IRS.  [3-26-12]