CONTACT: Jordan Libowitz
202-408-5565 | [email protected]
Washington — By disregarding and failing to disclose $850,000 in political spending, Independence and Freedom Network (IFN), an Ohio nonprofit, appears to have violated federal tax law, according to a complaint filed by Citizens for Responsibility and Ethics in Washington (CREW) with the IRS. IFN’s disclosure failures also raise serious questions about whether the group violated its tax-exempt status by making politics its primary activity, according to the complaint.
In its 2017 tax year, IFN filed a short-form 990-N tax return, which requires minimal reporting and is accordingly reserved for tax exempt organizations whose receipts total less than $50,000. However, IFN made an $850,000 donation to Onward Ohio, a political action committee, which warranted the completion of a detailed, full Form 990. The group’s donation funded political ads supporting former Ohio Lt. Gov. Mary Taylor’s bid for governor. IFN is registered as a section 501(c)(4) social welfare organization and cannot make politics its primary focus. IFN’s failure to accurately report this significant spending through the required tax return raises questions about the group’s transparency and whether politics was its primary activity, which would violate its tax-exempt status.
“When groups like IFN intentionally hide their political spending, it raises serious concerns about secret outside influence corrupting elections and taking power away from voters,” said CREW Executive Director Noah Bookbinder. “The IRS should immediately investigate IFN’s gross underreporting of their political spending and take appropriate action to hold IFN accountable.”
IFN is not the first Ohio-based dark money group to potentially violate its tax-exempt status and fail to disclose its donors. In June 2018, CREW filed a complaint with the IRS and Federal Election Commission (FEC) against Freedom Vote for similar campaign activity, including using funds for political ads. CREW recently filed a lawsuit against the FEC for failing to hold Freedom Vote accountable. CREW also filed complaints in June 2016 against Moving Ohio Forward, a section 501(c)(4) group that appears to have spent more than half its expenditures on politics but failed to disclose its donors.
“Ohio voters have repeatedly been denied information about who is influencing their elections,” Bookbinder said. “The IRS can take an important step towards ensuring transparency by investigating IFN.”