PUBLIC INTEREST WATCH OPENS INVESTIGATION INTO “FOCUS ON THE FAMILY”
Colorado-Based Organization Using Tax Exempt Funds to Lobby Against Gay Marriages
(Los Angeles)-- Public Interest Watch has opened an investigation into possible violations of tax law by Colorado Springs-based Focus on the Family based on media accounts of the charitable organization’s high profile lobbying activities.
Perhaps one of the most frequently violated provisions of the federal tax code is IRC 501(c)3. This is the law that grants special tax-exempt status to nonprofit organizations that are operated for charitable and certain other public benefit purposes, such as education. In addition to exempting an organization from income tax, 501(c)3 status entitles a group to solicit tax-deductible contributions (and thereby tap into a form of taxpayer funding).
This law is being routinely violated by ideological and social action groups that improperly obtain 501(c)3 exempt status by describing their purposes to the IRS as "educational."
While the IRS has so far done virtually nothing to stop this form of abuse, federal tax laws and the IRS' own regulations make it very clear that propaganda campaigns or efforts to force social action do not qualify as education. Those who wish to undertake such crusades have every constitutional right to do so, but when they use tax-deductible contributions to fund such activity they break the law and violate the free speech rights of taxpayers who don't support their causes.
Under the tax laws, social action groups may be established as tax-exempt nonprofit organizations, but not as 501(c)3 organizations. Instead, such groups are exempt under IRC 501(c)4, which provides exemption from income taxation but does not confer eligibility to collect tax-deductible contributions.
Focus on the Family (FOF) is a 501(c)3 organization with gross receipts exceeding $131 million in 2002. Earlier this month, FOF President James Dobson met with President Bush to lobby the Administration to stop talking about the War in Iraq and rally around the Federal Marriage Amendment, which seeks a constitutional amendment to ban gay marriages.
Meanwhile, an FOF produced video is at the center of a Campaign Finance violation lawsuit in Montana, where its affiliated group, Montana Family Foundation is circulating signatures to place a Constitutional Amendment on the November ballot. The group’s website, family.org, comes complete with an “action center” which sends letters with political messages to targeted members of the Administration and Congress.
Once PIW has completed its investigation, it intends to formally communicate its findings to the Internal Revenue Service and other appropriate regulatory agencies.
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PIW is a 501(c)4 tax-exempt organization, which means contributions to PIW are not tax-deductible. Initial funding for PIW has been provided by business organizations.
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