“ALEC has deliberately and repeatedly failed to comply with some of the most fundamental federal tax requirements applicable to public charities. The information…also suggests, quite strongly, that the conduct of ALEC and certain of its representatives violates other civil and criminal tax laws and may violate other federal and state criminal statutes as well.”
–Complaint challenging the tax-exempt status of the American Legislative Exchange Council (ALEC) by Marcus Owens, who, for 10 years directed the IRS division responsible for approving organizations’ tax-exempt status, particularly as it applies to ALEC failure to report the payment of expenses to legislators through its ALEC Scholarship Fund for attendance at ALEC conferences.
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A case can be made that ALEC’s corporate donors these 30 years are guilty of tax fraud along with ALEC because donors took tax deductions for 501(c)(3) contributions to the lobbying organization with which they conspired to write laws introduced across the US.
Probably not because at the time the deductions were taken, they were legal and any action by the IRS to revoke ALEC’s tax exempt status would not be retroactive. Only deductions that would be claimed after any revocation of ALEC’s tax-exempt status would be subject to an audit and/or penalties. ALEC, on the other hand, conceivably could be cited-and penalized-if the IRS deems that it violated the terms of its status under the 501(c)(3) requirements.
ALEX is ACORN of the 1% andshould be dismantaled just like ACORN