IRS INVESTIGATING OVER 60 CHARITIES ON POLITICAL ACTIVITIES; FUROR OVER NAACP PROBE: More than 60 charities, churches and other tax-exempt groups have been contacted by the Internal Revenue Service about alleged improper political activities, the agency disclosed.
While the IRS is prohibited by law from disclosing the names of the groups, it said that about a third are churches. Groups found to have broken IRS rules related to political intervention can lose their tax-exempt status.
The disclosure about the investigations by the IRS comes on the heels of reports that the National Association for the Advancement of Colored People is under investigation by the agency for violating the terms of its tax-exempt status, in a probe that NAACP chairman Julian Bond claimed stemmed from comments he made that were critical of President Bush.
In a statement in late October, IRS Commissioner Mark Everson denied the claim, saying, "Any suggestion that the IRS has tilted its audit activities for political purposes is repugnant and groundless." According to reports that surfaced in late October, the civil rights organization was charged in an Oct. 8 IRS document of "distributing statements in opposition of George W. Bush for the presidency," during its July convention in Philadelphia.
Documents provided to the Associated Press by NAACP chair Julian Bond's office said that IRS agents were investigating his July 11 convention keynote address, in which he said of the Bush administration: "They preach racial neutrality and practice racial division. They've tried to patch the leaky economy and every other domestic problem with duct tape and plastic sheets. They write a new constitution of Iraq and they ignore the Constitution here at home," the AP reported.
The president had declined an invitation to speak at the NAACP confab.
Published reports quoted Bond as saying that he found it "Nixonian" for the administration to send such a letter a month before the presidential election, and said that it was designed to intimidate the group.
'RENAISSANCE, THE TAX PEOPLE' FOUNDER ARRESTED, PROMOTERS INDICTED FOR $84M FRAUD: The founder of a company charged with conspiring to defraud the government was arrested in late October crossing the border from Mexico to the United States near Laredo, Texas, the Department of Justice said.
A federal grand jury in August returned a 148-count indictment charging Renaissance, The Tax People Inc., its founder, Michael Craig Cooper, and employees Jesse A. Cota, Todd E. Strand and Daniel J. Gleason with conspiracy to defraud the United States by impeding the Internal Revenue Service, conspiracy to commit mail and wire fraud, willfully assisting in the preparation of fraudulent federal income tax returns, mail fraud, and wire fraud.
Cooper and Renaissance are also charged with money laundering, conspiracy to commit money laundering, and engaging in monetary transactions in criminally derived property of a value greater than $10,000.
The indictment, which remained sealed pending Cooper's Oct. 25 arrest, alleges that from June 1997 though April 2002, the four men operated a scheme to defraud the IRS and other individuals by marketing a program designed to sell individuals tax deductions through false, fraudulent and misleading representations.
According to court papers, Renaissance: The Tax People sold a fraudulent home-based business package through which it offered tax support to members in the form of purportedly legitimate tax return preparation, tax advice and audit protection. The indictment alleges that the four men operated an illegal pyramid scheme, requiring participants, referred to as "Individual Marketing Associates," to pay monthly fees to qualify for commissions and offering them the opportunity to receive commissions and bonuses for recruiting others to join Renaissance.
If convicted, each faces the possibility of long jail terms and stiff monetary penalties. The indictment also seeks the forfeiture of $84 million, plus land, vehicles, gold coins, bank accounts and life insurance polices.
