Today, Issue One and the Campaign Legal Center called on the Internal Revenue Service (IRS) to enforce penalties against Americans for Job Security — one of the top spenders of political “dark money” in recent years — for failing to file three years’ worth of mandatory tax returns. For this, Americans for Job Security could be punished with the loss of its tax-exempt status as well as monetary fines.
A tax-exempt business league under Section 501(c)(6) of the tax code, Americans for Job Security has spent more than $20 million on political ads that overtly called for the election or defeat of federal candidates since the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in 2010.
“One of the rules that nonprofits are expected to adhere to is the regular disclosure of their financial activities,” said Issue One Executive Director Meredith McGehee. “If nonprofits don’t play by these rules, they must be held accountable by the IRS. Being granted tax-exempt status is a privilege, and with this privilege, come many incontrovertible responsibilities — one of which is filing an annual return with the IRS. Americans for Job Security has clearly failed to adhere to this simple requirement.”
Added Brendan Fischer, director of the federal reform program at the Campaign Legal Center: “There must be meaningful consequences for groups that attempt to leave the public in the dark. Americans for Job Security has long deprived the public of information about the sources of its funding as it spent tens of millions of dollars influencing elections, and for the past three years, it has been evading the minimal transparency requirements associated with its tax-exempt status.”
For its part, Americans for Job Security has not filed a mandatory tax return since September 15, 2015 — a filing that detailed the organization’s receipts and expenditures between November 1, 2013, through October 31, 2014, along with other information.
This means that Americans for Job Security’s tax return for its fiscal year that ended October 31, 2015, is currently at least 566 days late. Its tax return for its fiscal year that ended October 31, 2016, is currently at least 201 days late. And three weeks ago, Americans for Job Security appears to have missed the deadline for filing its tax return for its fiscal year that ended October 31, 2017.
The Internal Revenue Code clearly states that organizations that do not file a tax return for three consecutive years will automatically lose their tax-exempt status. Americans for Job Security could also be fined thousands of dollars — if not tens of thousands of dollars — by the IRS.
Founded in 1997, Americans for Job Security was among the earliest political “dark money” groups — so-called because they do not publicly disclose their donors, unlike political action committees, super PACs, candidates and parties, which do.
In July 2016, the Federal Election Commission fined Americans for Job Security $43,000 after the agency concluded that the group should have disclosed a nonprofit known as the Center to Protect Patient Rights, then associated with the political network of billionaires Charles and David Koch, as a donor behind some of its political expenditures in 2010.
In addition to its own political spending, Americans for Job Security also played a prominent role in funneling tens of millions of dollars to two ballot measure fights in California during the 2012 election — part of a scheme that the California Fair Political Practices Commission later concluded was designed to hide the identities of the actual donors supporting the ballot measure efforts.
The new complaint from Issue One and the Campaign Legal Center is available online here.