The 60 Plus Association is a so-called “social welfare” nonprofit, organized under Section 501(c)(4) of the tax code. Such organizations are prohibited from making electoral politics their primary purpose. They are not required to publicly disclose the names of their donors — unlike candidates, parties and political action committees that are.
Campaign finance reform advocates for years have called on the IRS to investigate politically active nonprofits that spend significant portions of their budgets on election-related ads, but the agency has been slow to act. At the same time, the IRS has found itself embroiled in multiple congressional investigations regarding its alleged targeting of conservative nonprofits for additional scrutiny during the tax-exempt application process.
The 60 Plus Association’s apparent reporting discrepancies first began during the 2010 midterm elections, federal records indicate.
The group, which touts “a free enterprise, less government, less taxes approach to seniors issues,” spent about $6.7 million that year on advertisements that mostly attacked Democratic candidates, according to FEC records. When it later filed its required annual tax return with the IRS, it initially told the agency it spent about $7.2 million on “direct and indirect political campaign activities.”
Eighteen months later, in November 2013, however, the group amended that filing, changing the $7.2 million figure to $103,000.
The amended filing, which has never previously been reported, included a note saying the form was “now properly completed to reflect the organization’s political activities” — without further elaboration.
The group also asserted in the filing that it spent $7.2 million to “provide educational awareness about the effects of healthcare reform for seniors including influencing the election of political candidates and certain legislative initiatives.”
Adam Rappaport, senior counsel at the advocacy group Citizens for Responsibility and Ethics in Washington, called the 60 Plus Association’s actions “simply outrageous” and not compliant with the law.
“This definitely merits a complaint,” Rappaport continued, arguing that both the IRS and Department of Justice should take action against the conservative-leaning nonprofit.
Cleta Mitchell, a Washington, D.C.-based attorney who represents numerous conservative groups, offered this potential explanation: Nonprofits may divide up how election-related ads are accounted for “based on time.”
Assume, for instance, that a nonprofit like the 60 Plus Associations spends $1 million on a series of 30-second television ads attacking a Democratic politician for supporting an issue such as Obamacare.
But, say, only five seconds of the ad directs urges viewers to vote against the candidate.
The nonprofit, Mitchell argued, could then report only a small portion of the $1 million as political spending, while the rest would be deemed “educational expenditures.”
Other tax lawyers don’t buy it.
“I don’t know of any way you can legally come to the reporting position they’ve taken,” said Marcus Owens, a former director of the IRS exempt organizations division. “It’s kind of a thumb in the eye of the IRS.”
At minimum, Owens continued, the 60 Plus Association is “asking for an audit.”