The Wisconsin Democracy Campaign filed complaints Tuesday against three tax-exempt organizations claiming they violated federal revenue codes for non-profit groups by participating in the political campaign for Wisconsin Gov. Scott Walker.
WDC Director Mike McCabe said the campaign filed the complaints on the basis that the Heartland Institute, Americans for Prosperity and the MacIver Institute violated the federal Internal Revenue Code that prohibits charitable organizations from participating in a political campaign.
He added WDC wants the Internal Revenue Service to investigate the organizations, which could lead to the IRS revoking their tax-exempt statuses, revoking their ability to provide their donors deductions on their taxes or to the groups ending engagement in election activity.
The complaints call on the IRS to immediately enjoin the abuses by the organizations and assess the maximum penalties for the violations, which they say are “blatantly partisan” in support of Walker.
“It’s a very clear line that’s drawn in federal law, and these three groups have crossed that line,” McCabe said. “Actually, the most striking proof comes from their own admission.”
McCabe added the organizations’ leaders have publicly said they needed to influence the recall elections and spend money to ensure Walker survives the recall.
He said part of the problem associated with this action is that charitable organizations do not need to publicly disclose their funds, meaning they can keep their fundraising private and leave the public oblivious.
He added donations to charitable organizations, unlike those donated to political groups, are tax deductible, which leads to taxpayers subsidizing a particular political agenda.
While the complaint against the MacIver Institute claims they are engaged in non-exempt operations for Walker’s campaign, MacIver Institute President Brett Healy said in an email to The Badger Herald their efforts have focused solely on policy and the impact of budget and labor reforms in Wisconsin.
“The fact of the matter is every week there are more and more examples of how it’s working, and we will continue to share those facts despite any and all attempts to silence us,” Healy said.
While the organization may not expressly reference voting or elections, the complaint states the group’s “It’s Working, Wisconsin” campaign launched last October contributes to Walker’s campaign to defeat the recall.
Heartland Institute spokesperson Tammy Nash said in an email to The Badger Herald the projects planned under their “Operation Angry Badger” project qualify as research and education activities allowed by federal law for charitable organizations with tax-exempt status.
The complaints against the Heartland Institute claim the initiative calls for direct intervention in Walker’s recall campaign, citing the organization’s plan to spend more than $600,000 on advertisements, web promotions and other publications on the collective bargaining legislation passed last year.
“This isn’t the first time that there’s been a blatant abuse of a charitable organization for private aims,” McCabe said. “But it’s not often that you see a smoking gun. It’s not often that you see admissions of that kind of activity from the leaders of the groups themselves.”
The IRS will review the complaints and rule on how to proceed with the matter.