Ways and Means Democrats Call on Treasury to Update Guidance Warning Tax-Exempt Organizations About Engaging in Insurrection Activities

Jan 13, 2021
Press Release

WASHINGTON, DC— Today, House Ways and Means Chairman Richard E. Neal (D-MA) led Committee Democrats in urging U.S. Department of the Treasury (Treasury) Secretary Steven Mnuchin to act upon news reports suggesting that tax-exempt organizations had a role in the seditious and destructive activities that took place last week at the United States Capitol. The members asked Treasury to issue emergency guidance detailing how current laws, rules, and sanctions apply to tax-exempt organizations participating in illegal activities and to consider whether any actions against or investigations of specific organizations may be appropriate in light of these reports.

“We are outraged by recent reports alleging that tax-exempt organizations may have incited and facilitated this act of insurrection that gravely endangered the security of the United States and its institutions of government,” wrote the Ways and Means Democrats. “We must ensure that tax-free dollars are never used to plan or sponsor illegal activities aimed at undermining the Constitution, the rule of law, and our American democracy.”

The members reminded the Secretary that, “tax-exempt organizations must be operated exclusively for exempt purposes.  The Internal Revenue Service (IRS) has long held that organizations engaged in the planning and sponsoring, as well as the actual conduct, of illegal activities do not qualify for exemption.”

“Given the media reports and long-standing position on these activities, we urge the Department of the Treasury to immediately issue emergency guidance to tax-exempt organizations on the current laws, rules, and sanctions related to their participation in illegal activities seeking to overturn or interfere with the conduct of our government. The guidance should clarify what specific actions and conduct are not permissible by a tax-exempt organization in support of an attack on the Capitol or any Federal or state persons or buildings,” the Ways and Means Democrats emphasized. “Additionally, we ask that you consider whether any actions against or investigations of specific organizations may be appropriate in light of these reports.”

Read the full letter HERE.

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