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Democrats Push for IRS Investigation of NRA

SEP. 1, 2020

Democrats Push for IRS Investigation of NRA

DATED SEP. 1, 2020
DOCUMENT ATTRIBUTES
  • Authors
    Schneider, Rep. Bradley Scott
    Gomez, Rep. Jimmy
    Thompson, Rep. Mike
    Davis, Rep. Danny K.
    Blumenauer, Rep. Earl
    Pascrell, Rep. Bill, Jr.
    Cooper, Rep. Jim
    DelBene, Rep. Suzan K.
    Norton, Del. Eleanor Holmes
    Lynch, Rep. Stephen F.
    Raskin, Rep. Jamie
    Khanna, Rep. Ro
    Kelly, Rep. Robin L.
    Speier, Rep. Jackie
    Moore, Rep. Gwen
    Suozzi, Rep. Thomas R.
    Connolly, Rep. Gerald E.
    Evans, Rep. Dwight
    Murphy, Rep. Stephanie N.
    Kildee, Rep. Daniel T.
    Panetta, Rep. Jimmy
    Chu, Rep. Judy
    Ocasio-Cortez, Rep. Alexandria
    Sánchez, Rep. Linda T.
    Higgins, Rep. Brian
    Sarbanes, Rep. John P.
    DeSaulnier, Rep. Mark
    Boyle, Rep. Brendan F.
    Krishnamoorthi, Rep. Raja
    Larson, Rep. John B.
    Sewell, Rep. Terri A.
    Horsford, Rep. Steven
    Doggett, Rep. Lloyd
    Beyer, Rep. Donald S., Jr.
  • Institutional Authors
    U.S. House of Representatives
    U.S. House Ways and Means Committee
    U.S. House Oversight and Reform Committee
  • Code Sections
  • Subject Area/Tax Topics
  • Industry Groups
    Nonprofit sector
  • Jurisdictions
  • Tax Analysts Document Number
    2020-33868
  • Tax Analysts Electronic Citation
    2020 TNTF 170-30
    2020 EOR 10-48
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2020, p. 491
    86 Exempt Org. Tax Rev. 491 (2020)

September 1, 2020

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, D.C. 20224

Dear Commissioner Rettig:

As members of the House Ways and Means Committee and the House Oversight and Reform Committee, we write today to express our serious concerns about the continued tax-exempt status of the National Rifle Association (NRA) and NRA Foundation. The Ways and Means Committee takes seriously its responsibility to exercise rigorous oversight of the administration of our federal tax laws by the Internal Revenue Service (IRS), and the Oversight and Reform Committee is the principal oversight committee of the House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X. Together, we would like to ensure that these tax-exempt organizations are operating within the spirit and letter of the Internal Revenue Code (IRC).

We are increasingly concerned about the need for an investigation into the NRA, which has been granted tax-exempt status under Section 501(c)(4) of the IRC, and the NRA Foundation, which has been granted tax-exempt status under Section 501(c)(3) of the IRC. Tax-exempt organizations must adhere to strict, specific requirements to retain their exemption from federal tax — and no tax-exempt organization is above the law.

As most recently highlighted by allegations against these organizations filed by the Attorneys General of New York and the District of Columbia, and supported by an independent investigation by a member of the Ways and Means Committee, both the NRA and the NRA Foundation are accused of a disturbing pattern of abusing their not-for profit status. Legal complaints filed by the Attorneys General of New York and the District of Columbia further document the ways in which the NRA and the NRA Foundation persistently operated in a manner that flew in the face of their not-for-profit status.

As a New York charity, the NRA is legally required to serve the interests of its membership and advance its charitable mission.1 The lawsuit filed by the New York Attorney General outlined a pattern of egregious self-dealing by directors or members in control of the organizations, looting corporate assets solely for personal benefit, and using vendors and contractors to hide improper use of funds or conflicts of interest. All these actions were taken in an effort to divert “millions of dollars away from the charitable mission, imposing substantial reductions in its expenditures for core program services, including gun safety, education, training, member services, and public affairs.”2 Equally concerning, it's alleged that whistleblowers who spoke up within the NRA were “quashed or ignored.”3

These allegations in these two complaints raise questions as to the federal tax-exempt status of both organizations. It is the IRS's responsibility to ensure tax-exempt organizations operate within the requirements of Section 501(c) of the IRC and the specific rules and regulations qualifying organizations must follow to enjoy tax-exempt status. Tax-exempt status is a privilege — the American people rightly expect any organization that skirts the rules for personal gain be excluded from this privileged status.

We are concerned that the allegations made by the Attorneys General of New York and the District of Columbia outline not only ongoing abuse at the NRA and NRA Foundation, but also a long-term pattern of diminished enforcement by the IRS. Without proper enforcement of these tax provisions, the American people are effectively subsidizing self-dealing and gross mismanagement within organizations like the NRA and NRA Foundation that appear to have grossly abused their status.

In light of this new information, we respectfully ask that you review whether the recent allegations against the NRA and NRA Foundation warrant reconsideration of the organizations' federal tax-exempt status under Sections 501(c)(3) and (c)(4) of the IRC. Should you determine the IRS lacks the sufficient resources or information to undertake a thorough review, we ask that you provide recommendations to Congress on how we can best ensure the IRS is able to enforce the requirements for tax-exempt organizations.

Tax-exempt organizations are sewn into the fabric of American society and play a critical role in improving the lives of millions of Americans. We must ensure the American people can trust that our tax laws are properly enforced. When there are instances of abuse, it is incumbent on the Executive Branch and Congress to investigate and act. Our request for an IRS review is irrespective of any policy differences we may have with the NRA; our request is based upon the foundational principle that tax-exempt organizations must play by the rules in order to enjoy their privileged status. No organization that wantonly and repeatedly abuses these rules in order to advance and enrich the financial interests of its leaders should be allowed to enjoy privileged tax-exempt status.

Thank you in advance for your consideration of our request.

Sincerely,

Bradley S. Schneider
Member of Congress

Jimmy Gomez
Member of Congress

Don Beyer
Member of Congress

Mike Thompson
Member of Congress

Danny K. Davis
Member of Congress

Earl Blumenauer
Member of Congress

Bill Pascrell, Jr.
Member of Congress

Jim Cooper
Member of Congress

Suzan K. DelBene
Member of Congress

Eleanor Holmes Norton
Member of Congress

Stephen F. Lynch
Member of Congress

Jamie Raskin
Member of Congress

Ro Khanna
Member of Congress

Robin L. Kelly
Member of Congress

Jackie Speier
Member of Congress

Gwen Moore
Member of Congress

Thomas R. Suozzi
Member of Congress

Gerald E. Connelly
Member of Congress

Dwight Evans
Member of Congress

Stephanie Murphy
Member of Congress

Daniel T. Kildee
Member of Congress

Jimmy Panetta
Member of Congress

Judy Chu
Member of Congress

Alexandria Ocasio-Cortez
Member of Congress

Linda Sánchez
Member of Congress

Brian Higgins
Member of Congress

John P. Sarbanes
Member of Congress

Mark DeSaulnier
Member of Congress

Brendan F. Boyle
Member of Congress

Raja Krishnamoorthi Member of Congress

John B. Larson
Member of Congress

Terri A. Sewell
Member of Congress

Steven Horsford
Member of Congress

Lloyd Doggett
Member of Congress

FOOTNOTES

1New York vs. NRA, et. al., Plaintiff Preliminary Statement at Pg. 6 (Aug. 6, 2020), https://ag.ny.gov/sites/default/files/summons_and_complaint_1.pdf

2New York vs. NRA, et. al., Plaintiff Preliminary Statement at Pg. 6 (Aug. 6, 2020), https://ag.ny.gov/sites/default/files/summons_and_complaint_1.pdf

3Ibid. pg. 9

END FOOTNOTES

DOCUMENT ATTRIBUTES
  • Authors
    Schneider, Rep. Bradley Scott
    Gomez, Rep. Jimmy
    Thompson, Rep. Mike
    Davis, Rep. Danny K.
    Blumenauer, Rep. Earl
    Pascrell, Rep. Bill, Jr.
    Cooper, Rep. Jim
    DelBene, Rep. Suzan K.
    Norton, Del. Eleanor Holmes
    Lynch, Rep. Stephen F.
    Raskin, Rep. Jamie
    Khanna, Rep. Ro
    Kelly, Rep. Robin L.
    Speier, Rep. Jackie
    Moore, Rep. Gwen
    Suozzi, Rep. Thomas R.
    Connolly, Rep. Gerald E.
    Evans, Rep. Dwight
    Murphy, Rep. Stephanie N.
    Kildee, Rep. Daniel T.
    Panetta, Rep. Jimmy
    Chu, Rep. Judy
    Ocasio-Cortez, Rep. Alexandria
    Sánchez, Rep. Linda T.
    Higgins, Rep. Brian
    Sarbanes, Rep. John P.
    DeSaulnier, Rep. Mark
    Boyle, Rep. Brendan F.
    Krishnamoorthi, Rep. Raja
    Larson, Rep. John B.
    Sewell, Rep. Terri A.
    Horsford, Rep. Steven
    Doggett, Rep. Lloyd
    Beyer, Rep. Donald S., Jr.
  • Institutional Authors
    U.S. House of Representatives
    U.S. House Ways and Means Committee
    U.S. House Oversight and Reform Committee
  • Code Sections
  • Subject Area/Tax Topics
  • Industry Groups
    Nonprofit sector
  • Jurisdictions
  • Tax Analysts Document Number
    2020-33868
  • Tax Analysts Electronic Citation
    2020 TNTF 170-30
    2020 EOR 10-48
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2020, p. 491
    86 Exempt Org. Tax Rev. 491 (2020)
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