The Alliance to Protect Nantucket Sound may have broken federal tax law during the recent political campaign for Massachusetts governor.
The nonprofit 501(c)(3) group that has led the fight against the proposed Nantucket Sound wind farm for almost a decade paid more than $32,000 for radio spots critical of Gov. Deval Patrick. The spots ran on five stations across the state in the lead-up to his November re-election.
The ad asked listeners if they were tired of paying high electric bills and stated that if Patrick has his way, “172 communities across Massachusetts will soon be paying even more.” The ad hammered Patrick for helping National Grid sign “a backroom, no-bid deal” with Cape Wind and asked listeners to join the other gubernatorial candidates who oppose the 130-turbine project.
The ad directed listeners to a website maintained by the Alliance, where a graphic juxtaposed Patrick’s support of Cape Wind with an image of his opponents’ stance on the project’s impact on electric rates.
According to federal tax law, nonprofit 501(c)(3) groups such as the Alliance must “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
“I believe that we were engaging in voter-education activities, which would fall within what we are allowed as a 501(c)(3),” Alliance President and Chief Executive Officer Audra Parker said Tuesday.
Among the factors that the IRS uses to determine whether a communication constitutes campaign intervention by a 501(c)(3) group is whether the statement identifies a candidate for public office and whether the statement expresses approval or disapproval for a candidate’s action or position, according to Abby Levine, legal director of advocacy programs for the Alliance for Justice, a Washington, D.C.-based nonprofit group that provides training for other non-profits.
The IRS also looks at timing of a statement’s release, whether the issue raised has been an issue distinguishing candidates and whether the statement is part of an ongoing series of communications by an organization on the issue outside the election.
“They look at all of these facts and circumstances,” Levine said, adding, however, that it is not clear how each of these factors may apply to a given situation. The IRS standards are broadly applied and can include situations in which an organization makes one candidate look good and another look bad, she said.
If the IRS determines an organization has violated its 501(c)(3) status by taking part in a political campaign, there are a variety of actions the IRS can take, from doing nothing to revoking a group’s tax status as a non-profit, Levine said.
“I don’t believe our status is at risk,” Parker said.
State campaign finance laws include narrower requirements.
The group Common Cause of Massachusetts filed a request last month with the state’s Office of Campaign and Political Finance asking for an investigation into the ads. The Alliance then filed a statement with the agency outlining the ad expenditures and which donors paid for them.
That statement appeared to satisfy state campaign finance regulations, Common Cause executive director Pam Wilmot said.
“Whether they engaged in direct advocacy under IRS rules or not is not 100 percent clear to me,” she said. “They are very close to the line, possibly over it.”
|Wind Watch relies entirely
on User Funding