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Americans Elect Refuses to File Public Disclosure Form 1024, Keeping its Political Business Private

Americans Elect wants to run the first ever national online election to nominate a candidate for president in six months’ time, but it seems it can’t or won’t get its paperwork straight.

I’ve been asking for Americans Elect to share its publicly-required tax documentation for nearly a year now, and Americans Elect had not complied at all, even though there is a 30-day deadline for corporations like Americans Elect to do so. But four days ago, that seemed to change. Four days ago, Americans Elect CEO Kahlil Byrd seemed to promise that Americans Elect would place a copy of its IRS Form 1024 on its webpage. 501c4 corporations are required by the IRS to share Form 1024 with members of the public upon request, and for good reason: Form 1024 shares a number of details about the inner workings of corporations that aim to transform American politics, as Americans Elect surely does. The IRS requirements for disclosure of Form 1024 are there to maintain transparency and openness in American politics.

Instead of releasing Form 1024 this morning, Americans Elect Chief Technology Officer Joshua Levine released a brief note declaring that Americans Elect has refused to create any Form 1024 at all. Levine wrote:

Americans Elect is organized and operated as a social welfare organization under Section 501(c)(4). As a tax-exempt organization under Section 501(c)(4), Americans Elect is not required to file an application for recognition of exemption (Form 1024) with the Internal Revenue Service in order to qualify for tax-exempt status under Section 501(c)(4). Only certain organizations must apply for recognition of exemption to qualify for federal tax-exempt status, including most Section 501(c)(3) organizations. See Instructions for IRS Form 1024, Purpose of Form, at http://www.irs.gov/pub/irs-pdf/i1024.pdf.

But that’s not what http://www.irs.gov/pub/irs-pdf/i1024.pdf says. There is no declaration that 501(c)(4)s don’t have to fill out Form 1024. On the contrary, that file, which contains IRS instructions for filling out Form 1024, declares that “a social welfare organization seeking recognition under section 501(c)(4) must complete Parts I through III and Schedule B.”

Further, IRS Publication 557, which has to do with the reporting requirements of Section 501c4, declares:

501(c)(4) – Civic Leagues and Social Welfare Organizations

If your organization is not organized for profit and will be operated only to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). The discussion that follows describes the information you must provide when applying. For application procedures, see chapter 1….

Application Procedures

Oral requests for recognition of exemption will not be considered by the IRS. Your application for tax-exempt status must be in writing using the appropriate forms as discussed below.

Form 1024 itself has a special subsection, Schedule B, devoted specifically to 501(c)(4) corporations just like Americans Elect.

Multiple IRS documents seem to very clearly state that Americans Elect must file Form 1024. Form 1024 contains information that you deserve to know, considering that Americans Elect is trying to elect a President and all. But Americans Elect refuses to let you know. Americans Elect refuses to be transparent. Americans Elect is holding the truth about itself back from all of us.

Why? What is Americans Elect so interested in hiding? I expect we’ll find out when Americans Elect has finished stonewalling and finally complies with IRS regulations. That should be in 2013, after the next election is over.

19 comments to Americans Elect Refuses to File Public Disclosure Form 1024, Keeping its Political Business Private

  • Bill

    In the immortal words of the I Ching, “Perseverance Furthers.”
    Keep up the pressure on AECorp to come clean. They’re starting to crack.

  • I just let Americans Elect Chief Technology Officer Joshua Levine know that I’m putting an official IRS Form 3949 A complaint into the mail today. My message to Mr. Levine reads:

    "I have tried, since 2010, to communicate with Americans Elect and obtain this information without recourse to formal channels. Americans Elect has for the most part refused to initiate communications in return. Now that Americans Elect has declared unilaterally that it doesn't need to share the information in Form 1024 with the public -- even though IRS documents seem to specifically state that it must -- I have no further option but to join you, William.

    "I just put my Form 3949-A in the mail.

    "I encourage others to inform themselves and then to do the same.

    "It's a shame it had to come to this, Joshua. I have respected you as the only person in the entire Americans Elect structure who was ever willing to reciprocate my efforts at contact. I hope you come around and see the need for real transparency by Americans Elect. But I'm not waiting any more."

    The text of my complaint reads:

    "Despite repeated requests by phone, e-mail and postal mail for Americans Elect to supply its Form 1024 Request for Exemption, beginning in 2010 (see http://wp.me/pdWLh-7Va ), Americans Elect refused to supply such document or to communicate with me in this regard. On the morning of November 15, 2011 (see http://bit.ly/tFrOvB ) Americans Elect Chief Technology Officer Joshua Levine responded that Americans Elect is organized and operated as a 501(c)(4) social welfare organization, but that it feels it is not required to submit Form 1024 to the IRS or to share Form 1024 with the public, and therefore has not done so. Americans Elect has been organized as a 501(c)(4) social welfare organization for more than one's year's time. Americans Elect is a prominent group seeking to elect its own candidate for president. I hope the IRS will require Americans Elect to furnish Form 1024."

  • I’ve started and led several 501(c)3 organizations over the years. I agree that it would be unwise for Americans Elect, or any similar group, to cloak their structure or activities. However, I wonder whether they are focused on the same meaning of “tax exempt” as this critique. Their “Give” page ( https://secure.americanselect.org/give ) explicitly states: “Contributions are not deductible for federal income tax purposes.” That is not something most “tax exempt” organizations would say!

    IRS guidance (and legal language) makes a clear distinction between the meaning of “you should file…” (the language this post cites) and the meaning of “you must file…” By that fundamental standard, filing is not a requirement.

    You, I, and others may find it tempting to draw conclusions — but as long as Americans Elect doesn’t promote tax-deductibility of donations, I doubt that the absence of a Form 1024 violates IRS policy.

    • Ralph

      Great, now the organization that was going to end “politics as usual” is playing semantics with “should” and “must.” Doesn’t it depend what the definition of “is” is?

    • Bill

      Nexcerpt, the tax code states explicitly that donations to 501(c)(4) organizations are not tax deductible (unlike 501(c)(3)s and several other flavors of 501s)…that’s why AE offers that disclaimer.

    • Well, we’ll let the IRS be the judge of all that, which is what the report form is all about. Thanks for sharing that perspective, Nexcerpt.

      P.S. If you look up the instructions for IRS Form 1024, it states that “a social welfare organization seeking recognition under section 501(c)(4) must complete Parts I through III and Schedule B.” That “must” language is indeed in the post above.

  • Lee Mortimer

    You continue to incorrectly state that Americans Elect is “seeking to elect its own candidate for president.” AE is conducting a “nominating process” to select candidates who will compete in the November 2012 election. Once a ticket is nominated, Americans Elect will have no further role in the campaign and will effectively cease to exist. The AE-nominated candidates will be on their own and can receive no funding or anything of material value from the Americans Elect organization. Whether Americans Elect must file a Form 1024 remains to be seen. But you don’t help your case by including a misstatement of fact in your complaint to the IRS.

  • Lee Mortimer

    For anyone curious about Jim’s notation, let me shed some light on what’s behind it. I came upon this website a few months ago and was struck by the strident rhetoric against Americans Elect. I have tried to add another perspective to the discussion. That has often displeased Jim, particularly when it knocked holes in some of his assertions.

    Irregular Times has been relentless in pursuit of AE’s funding sources for more than five years. Nothing wrong with that, and I have even commended Jim for some of his findings. But I also raised an occasional question as to whether there might be an “angel” in the background providing some level of financial assistance to sustain IT’s effort. I made a point of saying there would be nothing wrong or improper in getting help from a source who appreciates IT’s work.

    Jim seized on my rather innocuous inquiries and claimed that I was systematically accusing Irregular Times of being “corrupt tools in the pay of some puppet master” and “just making shit up.” This is a complete fabrication and a wild distortion of anything I have ever said on this website. But it did provide a convenient excuse for Jim to avoid the substantive rebuttals I have made to some of his assertions.

    You can judge for yourself whether Jim is hiding behind personal attacks when he is unable to rebut opinions that differ from his own. Go to: http://irregulartimes.com/index.php/archives/2011/10/06/americans-elect-posts-draft-rules-and-candidate-handbook/ and read Jim’s statement at (10/13/2011 at 8:08 pm) and then my response at (10/14/2011 at 9:24 am).

  • Bill

    Jim, I for one would like to congratulate you for having “been relentless in pursuit of AE’s funding sources for more than five years.” This can’t have been easy for you, especially considering that Americans Elect was was born in 2010. Your civic-minded willingness to selflessly suffer the horrible physiological and psychological torments attendant to time-travel are an inspiration to us all.

  • Lee Mortimer

    Bill and Juniper — Thanks for your clarifications. Yes, I was referring to the combined experience of Americans Elect and its predecessor organization Unity08. IT’s critique began in June 2006, and Jim’s initial post “The people behind the money behind Unity08″ was Aug. 19, 2006. Nearly 500 critical posts over 5-1/2 years would seem to qualify as “relentless.” But I did say that I “commended Jim for some of his findings.” I just don’t understand why there is such an aversion to any differing opinion about Americans Elect on this website and why we can’t have a civil and respectful conversation on the subject.

  • Tanya R.

    This is a very interesting post…I was curious if you ever received form 1024 or any of their other documents that you requested? If so, please provide the link…would be interesting to read. thx!!

  • World's Greatest CPA

    I don’t know anything about this organization, but do know about 501(c)(4). The person above is not interpreting the 1024 application correctly. A (c)(4) must file the 1024 if it wants “recognition” from the IRS that it is tax exempt. Keep in mind, the IRS does NOT grant tax-exempt status, Congress does. The IRS only “recognizes” it. And only a public charity – 501(c)(3) is required to have the IRS recognize it – which is form 1023. A (c)(4), a (c)(6) and many other “tax-exempt” organizations are not required to file a 1024 to get recognition. So long as they operate in accordance with the laws as set by Congress, states, etc., they then are tax-exempt and file form 990 (if applicable). Why then would ANY (c)(4), (c)(6) or other nonprofit that is not a public charity file a 1024? Mainly to get reduced postage rates, certain state sales tax exemptions, or they just want the IRS to recognize it so they can get a determination letter to share with people like this guy who are asking for it. Others will elect to apply for the 1024 if they thing their activities are a gray area, or have other uncertainties, so they want to run it by the IRS for recognition so it is not questioned later.

    • chrmd

      Came across this website while writing my paper… did further research and thought you’d like to know that 26 C.F.R. § 1.501(a)–1(a)(3) requires 501(c)(4) organizations to file form 1024.

      Wording of Treasury Regulation:
      “An organization claiming exemption under section 501(a) and described in any paragraph of section 501(c) (other than section 501(c)(1) shall file the form of application prescribed by the Commissioner and shall include thereon such information as required by such form and the instructions issued with respect thereto.”

      Regulation can be found here:
      http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div8&view=text&node=26:7.0.1.1.1.0.1.1&idno=26

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