GOP Lawmaker Pushes IRS to Revoke Tax-Exempt Status of Stacey Abrams’ Nonprofit Amid Controversy

GOP Lawmaker Pushes IRS to Revoke Tax-Exempt Status of Stacey Abrams’ Nonprofit Amid Controversy

FIRST ON FOX: A prominent Republican lawmaker in the House of Representatives is urging the Internal Revenue Service to reconsider the tax-exempt status of a nonprofit organization associated with Stacey Abrams, the former Democratic candidate for governor of Georgia.

The nonprofit organization known as the New Georgia Project, which Abrams founded, recently faced a hefty fine of $300,000 due to violations of state election laws. This fine was issued by the Georgia Ethics Commission, signaling significant legal trouble for the group.

Jason Smith, the Chairman of the House Ways and Means Committee, described this fine as potentially the largest ethics penalty ever imposed in U.S. history. In a letter addressed to IRS Commissioner Melanie Krause, he discussed the implications of this unprecedented ruling.

Violation of Campaign Finance Laws

The Georgia Ethics Commission unanimously charged the New Georgia Project with failing to disclose more than $4 million in campaign contributions and over $3 million in expenditures during Abrams’ unsuccessful gubernatorial campaign in 2018. This lack of transparency raises serious questions about the organization’s compliance with campaign finance laws.

In his correspondence, Smith reiterated that organizations recognized under Internal Revenue Code Section 501(c)(3) are strictly forbidden from engaging in any political campaign activities. He emphasized that the IRS holds the authority to revoke a nonprofit’s tax-exempt status for noncompliance regarding political involvement.

Abrams’ Disconnect from the Organization

Abrams initially established the New Georgia Project in 2013 with the intent of enhancing voter registration efforts in Georgia. However, Smith noted that she has not been affiliated with the organization since 2017. 501(c)(3) nonprofits like New Georgia Project must refrain from backing specific political candidates, which complicates the organization’s standing.

New Georgia Project Action Fund and Tax Implications

Interestingly, the New Georgia Project has an affiliated organization, the New Georgia Project Action Fund, which can endorse candidates. However, contributions to this fund do not qualify as tax-exempt donations, adding another layer of complexity to this ongoing situation.

Smith further claimed that the New Georgia Project’s involvement in the 2018 election cycle represented a clear breach of its tax-exempt status. He referenced the findings of the Georgia Ethics Commission, asserting that the organization engaged in activities that extended beyond its designated tax-exempt purpose.

Calls for Urgent Action

In his letter, Smith urged Commissioner Krause to prioritize this case, stressing the importance of a swift investigation into the New Georgia Project’s operations. He insisted that the IRS must take immediate action to assess and potentially revoke the organization’s tax-exempt status.

Transitioning into the next steps, Smith’s letter outlined the urgency of addressing these violations, emphasizing the need for accountability among organizations benefiting from tax exemptions.

Responses from Involved Parties

Fox News Digital reached out to both the New Georgia Project and the IRS for comments but did not receive a response before the publication deadline. This lack of communication from either side raises further questions about the transparency of the ongoing situation.

In response to the ethics committee’s ruling, New Georgia Project attorney Aria Branch expressed disappointment. She noted that while the organization acknowledges the ruling regarding long-ago activities, they are eager to move forward and focus on future initiatives.

Implications for Nonprofits Nationwide

The implications of this case extend beyond Georgia, signaling a potential chilling effect on numerous nonprofits across the United States. As lawmakers intensify scrutiny over nonprofit organizations and their political actions, the precedent set by this case could lead to stricter regulations and a more vigilant IRS.

This situation has reignited the debate surrounding the role of nonprofits in political campaigning. Advocates argue that voter outreach efforts are crucial for democracy, while critics assert that engaging in political activities undermines the integrity of tax-exempt organizations.

Looking Ahead

The developments regarding the New Georgia Project and its tax-exempt status promise to unfold in the coming months. Stakeholders, including the IRS, advocacy groups, and the general public, will be closely monitoring the situation. This controversy underscores the vital balance between civic engagement and compliance with federal regulations.

As discussions progress, it becomes increasingly clear that the ramifications of this case will resonate far beyond Georgia’s borders, shaping the future of nonprofit operations nationwide.