Senate Democrats Ask IRS to Investigate NRA’s Tax-Exempt Status

(Bloomberg) -- Two top Senate Democrats are pressuring the Internal Revenue Service to investigate whether the National Rifle Association deserves to be a tax-exempt organization.

Senate Minority Leader Chuck Schumer and Senator Ron Wyden of Oregon sent a letter to the IRS Wednesday saying that the NRA’s contacts with Russian companies and individuals call into question whether the organization should qualify as a so-called 501(c)(4) organization that the IRS requires to be not-for-profit and operated exclusively for social welfare.

“Russia’s interference in the 2016 elections represented an unprecedented attack on American democracy,” the senators wrote in the letter. “In light of the continued efforts of Russia to undermine American democracy, IRS must use its full authority to prevent foreign adversaries from again exploiting tax-exempt organizations to undermine American interests.”

The call to investigate the NRA comes after Democrats on the Senate Finance Committee released a report last week that says the NRA paid for the travel of Russians in an ongoing relationship that allowed the foreign actors to influence the 2016 presidential election.

Maria Butina, one of the Russian nationals mentioned in the report, was convicted on a felony charge of acting as an unregistered foreign agent. The report also said that NRA executives used the organization to benefit themselves.

“This partisan investigation was fueled by unfounded allegations obviously driven by the minority’s dislike of the NRA’s political point of view,” William A. Brewer III, counsel to the NRA, said in a statement Wednesday. “The exercise should raise concerns about an abuse of government power and waste of taxpayer funds.”

Groups claiming social welfare status, such as the NRA, can participle in some political activity, but it can’t be their main focus, according to IRS rules. Losing its tax exemption could add to the organization’s financial troubles, which have grown in recent years as the group has been locked in expensive legal battles and executives have squabbled over spending.

To contact the reporter on this story: Laura Davison in Washington at ldavison4@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, Anna Edgerton

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