House Republicans Announce Probe Into IRS For Allegedly Allowing ‘Prohibited’ Political Activity

Photo by Drew Angerer/Getty Images

Daily Caller News Foundation logo
Robert Schmad Contributor
Font Size:

The GOP-led House Oversight and Accountability Committee announced a probe Wednesday into the Internal Revenue Service (IRS) for allegedly allowing nonprofits to engage in “prohibited” political activities.

House Oversight Chairman James Comer claims that the IRS has allowed certain 501(c)(3) nonprofits to engage in lobbying activities as a “substantial part” of their operations, which would violate the tax agency’s regulations, according to a letter released by the committee. The committee’s letter cites One Fair Wage, a nonprofit that advocates for an increased minimum wage, as an example of an organization that the IRS has allegedly allowed to operate outside of lobbying guidelines.

The IRS does not provide a concrete standard for what constitutes a “substantial part” of an organization’s spending going toward lobbying activities. Whether or not a nonprofit is violating lobbying restrictions is “determined on the basis of all the pertinent facts and circumstances in each case” by examining factors like time and money spent on lobbying, according to the IRS.

One Fair Wage has engaged in excessive lobbying, House Oversight’s letter alleges. (RELATED: DC Attorney General Launches Investigation Into Left-Wing Dark Money Juggernaut)

“Despite these limitations on political and lobbying activities by 501(c)(3) designated entities, activist advocacy organizations, such as One Fair Wage, Inc., seem to view their charitable work as indistinguishable from their substantial lobbying pursuits,” the letter reads.

One Fair Wage is involved in a campaign pushing legislation and ballot measures in 25 states to increase the minimum wage, according to its website. Comer’s letter cites legal documents where One Fair Wage described lobbying as its “organizational purpose” and discussed the importance of lobbying in its operations.

The committee is requesting IRS documents relating to 501(c)(3) enforcement activities as well as all documents and communications the agency possesses related to One Fair Wage. Nonprofits found to have violated the substantial part standard are liable to lose their tax-exempt status, according to the IRS.

One Fair Wage’s publicly available tax forms indicate that the organization spent about half a million dollars lobbying during the 2022 calendar year. The organization describes its purpose as working to “advance policy, drive industry change, and shift the narrative in order to ensure that all workers in America are paid at least the full minimum wage.”

WASHINGTON, DC - JUNE 07: House Oversight and Accountability Committee Chairman James Comer (R-KY) arrives to a joint committee hearing with the House Committee on Oversight and Accountability and House Committee on House Administration at the U.S. Capitol Building on June 07, 2023 in Washington, DC. The joint hearing was held to discuss reforms in voting laws in the District of Columbia. (Photo by Anna Moneymaker/Getty Images)

House Oversight and Accountability Committee Chairman James Comer (Photo by Anna Moneymaker/Getty Images)

Left-of-center nonprofits like the Gates Foundation, Tides Foundation and Windward Fund have poured hundreds of thousands of dollars into One Fair Wage, according to tax filings.

The Tides Foundation’s grant was to support “equity, human rights and economic empowerment.” The Gates Foundation, meanwhile, gave the organization funds to work toward “economic mobility and opportunity” while Windward Fund’s grant was for “environmental programs.”

Windward Fund is part of Arabella Advisors’ liberal dark money network.

The Arabella network regularly moves money from 501(c)(3) nonprofits it controls to its 501(c)(4) organizations, which have a greater license to engage in political operations.

New Venture Fund, a 501(c)(3) managed by Arabella, for instance, transferred more than $30 million to the Sixteen Thirty Fund, a 501(c)(4) also managed by Arabella, in 2022, tax forms show. Sixteen Thirty Fund supported a pro-abortion ballot measure in Michigan and funded groups supporting Democrats in 2022.

House Oversight, the IRS and One Fair Wage did not immediately respond to the Daily Caller News Foundation’s requests for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.