Congress

IRS should investigate the National Rifle Association for self-dealing, congressman says

Schneider: the NRA may have abused its status as a nonprofit

Wayne LaPierre, CEO of the National Rifle Association, faces new scrutiny for his close relationship with public relations company Ackerman McQueen. (Photo By Tom Williams/CQ Roll Call)

The Internal Revenue Service should consider revoking the National Rifle Association’s status as a nonprofit organization in light a recent report that the group has enriched its executives at the expense of its 5 million members, a Democratic congressman said Thursday.

Rep. Brad Schneider addressed a letter to the commissioner of the IRS asking the agency to interrogate whether the NRA has misappropriated member dues into the pockets of a small group of executives in a series of sweetheart deals.

The NRA did not immediately reply to a request for comment. 

Schneider raised concerns about what he described as the NRA’s “self-dealing, deceptive billing practices, and preferences in contracting,” citing an April investigation by The Trace published in The New Yorker. 

If the IRS were to no longer recognize the powerful gun lobby as a tax-exempt social welfare organization, the group would likely not survive, according to tax experts cited in the story. 

The congressman also raised the possibility that NRA executives could face legal consequences.

“All entities and individuals who skirt the rules for personal gain should be pursued and penalized,” he wrote.

The IRS should act or risk damaging the public's trust in the agency, Schneider said. 

“The American people trust the government will actively ensure all organizations are not engaging in misconduct, and specific to tax-exempt organizations, refraining from impermissible political activity,” Schneider wrote.

Schneider also grilled the Trump administration official who provides oversight of the IRS in a Ways and Means Committee hearing Thursday about the NRA’s possible abuse of the tax code.

J. Russell George, the Treasury Inspector General for Tax Administration, said the agency has improved its oversight of 501(c)4s following a report last year indicating that as of January 2018, there have been no revocations of tax exempt status for impermissible political activity. Social welfare organizations like the NRA are supposed to be limited in how much of their budgets they can devote to overt political endorsements. 

The budget of the IRS has undergone steep cuts since Republicans began criticizing the agency as unfairly scrutinizing conservative organizations. 

Schneider’s letter turns up the heat on the NRA. Everytown for Gun Safety has also addressed the IRS requesting an investigation, according to Shannon Watts, the president of Everytown’s sister organization Moms Demand Action.

The NRA also faces an inquiry by the New York attorney general’s office, which has started issuing subpoenas, CNN reported.

Watch: ‘Vote Them Out:’ Thousands March on Washington to Protest Inaction on Gun Violence

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