EXCLUSIVE — The IRS must enact reforms to stop the rampant corruption in the charitable sector happening under its watch, Texas Rep. Lance Gooden urged commissioner Charles Rettig in a letter Tuesday.
The national Black Lives Matter group’s refusal to answer basic questions about its finances while dropping millions on luxurious mansions, charitable organizations intentionally downplaying the risks of opioid addiction, and anti-fossil fuel nonprofit groups raking in foreign cash while working to undermine national security are among the bad actors in the charitable space Gooden highlighted in his letter.
“I am deeply disturbed by the rampant corruption occurring in the nonprofit sector,” Gooden, a Republican, told the Washington Examiner. “Congress and the IRS must investigate Russian donations, donor funded mansions, and fraud within these groups. Organizations like Black Lives Matter must be transparent with their donors and the American people, or their tax-exempt status should be revoked.”
BLM PURCHASED $6 MILLION LOS ANGELES MANSION WITH DONOR MONEY: REPORT
Gooden’s letter was sent one day after it was revealed that the Black Lives Matter Global Network Foundation, the charity that represents the national BLM movement, purchased a $6 million mansion in Los Angeles with donor cash in October 2020 and then maneuvered to keep the purchase a secret by transferring the property’s deed to an LLC.
The news came over two months after BLM shut down its fundraising operations after receiving legal threats from California and other liberal states over its failure to report what it did with its $90 million windfall from 2020. While BLM pulled an accounting maneuver to give it until mid-May to report what it did with its 2020 finances, the group’s fundraising streams remain closed.
Gooden said charities such as BLM feel they can operate with impunity because the IRS rarely imposes penalties for not filing their Form 990 tax returns on time.
“The IRS’s failure to ensure compliance has created an environment where tax-exempt organizations continuously fail to disclose relevant information and raise concerns about the illicit financial activity,” Gooden said.
The lawmaker also requested the IRS improve transparency surrounding fiscal sponsorship arrangements.
Some charities such as the Tides Foundation sponsor dozens of smaller organizations at any given time, an arrangement that allows the sponsored group essentially to borrow its charitable status. But it’s impossible to review the finances of any given fiscal sponsor because Tides reports the financial activities of all its sponsored organizations as one lump sum in its Form 990 returns.
BLM was fiscally sponsored by the California charity Thousand Currents from 2016 through July 2020. The group shifted its sponsorship to the Tides Foundation in July 2020, until it was granted the ability to operate as an independent charity by the IRS in December 2020.
Gooden also requested the IRS change the Form 990 tax return to require charities to report the names of their foreign donors. He also requested the agency require charities to report more information on their equity investments.
“It is critical that we maintain the public’s trust in tax-exempt organizations and prohibit activities that are not part of their charitable mission,” Gooden said. “Proper oversight of these organizations is a tremendous benefit to the American people, and I hope you will consider improving oversight and ensuring compliance.”
The IRS did not return a request for comment.
