"Is ALEC Anticipating an IRS Audit?" by Brendan Fischer at TruthOut

Is ALEC Anticipating an IRS Audit?

by Brendan Fischer at TruthOut

http://truth-out.org/news/item/13360-is-alec-anticipating-an-irs-audit

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The American Legislative Exchange Council (ALEC) appears to be anticipating an Internal Revenue Service (IRS) audit, after multiple complaints challenging the "corporate bill mill's" charitable status, based on documents recently obtained by Bloomberg News.

According to internal ALEC documents, the organization has discussed forming a nonprofit organized under Section 501(c)(4) of the tax code, apparently in anticipation of the IRS revoking ALEC's current "charitable" status. Charities (which are organized under Section 501(c)(3) of the tax code) as well as nonprofits are tax exempt, but ALEC's charitable status had allowed its corporate members to write-off their ALEC membership dues and costs as tax-deductible charitable contributions.

ALEC's charitable status has been challenged in multiple IRS complaints in the past year -- and despite publicly dismissing the allegations as "patently false" and "ignor[ing] applicable law," behind the scenes, ALEC's leadership apparently recognizes their vulnerability.

ALEC Executive Director Ron Scheberle discussed forming a 501(c)(4) called "ALEC NOW" in an August memo, claiming that if a 501(c)(4) were “operating fully prior to an IRS audit,” the agency might allow the newly-formed (c)(4) to continue operating and take over activities impermissible for a (c)(3) charity.

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