National Police Support Fund Passes IRS Audit & Tests with Full Marks, Including Comprehensive Organizational & Operational Tests
ALEXANDRIA, Va., May 12, 2023 /PRNewswire/ -- National Police Support Fund was given a green light to 'continue operations as is' and an all-encompassing clean bill of health after a thorough audit of fiscal years 2019 & 2020 by the Internal Revenue Service's Tax Exempt/ Government Entities Division. The 6 month long audit process and all of its findings are outlined below, all of which show that the organization is in good standing and full compliance with all laws and regulations for IRS Section 527 political organizations. National Police Support Fund passed both operational and organizational tests based on all applicable IRS laws, 8871 and 8872 filings, organizational bylaws & governing documents. An outline of the IRS organizational test and operational test is available at the end of this memo.
National Police Support Fund's Executive Director Simon Lewis had this to say about the results:
"I'm beyond pleased with the results of this comprehensive organizational and operational audit, and I"m proud of our team, who have helped to set a new, higher standard for accountability and accuracy in political nonprofit operations and reporting. When I helped found this organization in 2018, my vision was to become the preeminent grassroots pro-police political organization in the country, and our hard work pays dividends every day. We continue to fight for law enforcement officers, hold politicians accountable, and shine a light on the anti-police movement, and it's all thanks to our hundreds-of-thousands of supporters."
The Skyles Law Group from Chicago represented the organization in the detailed audit that was exhaustive and lasted almost 6 months. This process cost the organization an extensive amount of time, labor, and money to complete. These results are a huge vote of confidence in the effectiveness, transparency, and ethical leadership of the National Police Support Fund.
In its conclusion, the IRS audit found that the National Police Support Fund should continue operating as is, as it is in full compliance with all applicable laws and regulations. The organization's tax filings were accepted as is, with no excise tax or penalties attached to it. Everything that was listed as exempt activity was declared exempt by the IRS, with no changes or alterations required for direct or indirect exempt activities.
"The results of this audit are a great vote of confidence for the National Police Support Fund. The organization will utilize everything they have learned throughout this process and will implement even more lessons and best practices moving forward," Mr. Skyles of the Skyles Law Group commented.
The Internal Revenue Service audit consisted of going through all financial statements, full review of every general ledger transaction; review of organizational governance, bylaws, and any conflicts; fundraising & consultant contracts; direct & indirect exempt activity conducted by the organization, and a full analysis of any federal activity. The auditor also reviewed fundraising contracts and fundraising materials/scripts.
To be subject to tax only as a political organization under IRC Section 527, a political committee, association, fund, or other organization must meet both:
- The organizational test of Treas. Reg. 1.527-2(a)(2).
- The operational test of Treas. Reg. 1.527-2(a)(3).
To satisfy the organizational test, the organization must have the primary purpose of carrying on exempt function activities as defined in IRC Section 527. The organization does not need a formal charter or to be a corporation, trust, or association.
The organization must use a separate bank account to deposit and disburse political campaign. Rev. Rul. 79-11, 1979-1 C.B. 207.
When there are no formal documents, review the Form 8871 purpose statement.
Consider statements of the organization's members at the time it was formed that they intend to operate the organization primarily to carry on exempt function activities. Treas. Reg. 1.527-2(a)(2).
All organizations claiming exemption under IRC Section 527 are required to obtain EINs, even if they have no employees.
Operational Test:
To satisfy the operational test, the organization's primary activities must be exempt function activities as defined in IRC Section 527. The organization may engage in activities that are not exempt function income activities, but these may not be its primary activities. Treas. Reg. 1.527-2(a)(3).
IRC Section 527(e)(2) defines "exempt function" as "the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected or appointed."
Promoting the nomination of an individual for an elective public office in a primary election, or in a meeting (or caucus) of a political party is also an exempt function activity. Treas. Reg. 1.527-2(a)(1).
For tax years beginning after December 31, 1986, the exempt function of a political organization also includes making expenditures for a public office that would be allowable as a deduction under IRC Section 162(a) if incurred by the office holder.
Political organizations can continue to qualify under IRC Section 527 between elections even though not supporting a particular candidate, if engaged in activities related to and supporting the selection process.
Final documentation & results will be updated when it is provided to National Police Support Fund by the IRS.
About National Police Support Fund
National Police Support Fund is committed to promoting the interests and well-being of American police officers within the public policy process through grassroots political action. This grassroots movement is driven by everyday Americans who believe in supporting the rule of law and honoring the police officers who uphold and enforce it everyday.
National Police Support Fund is dedicated to providing a united voice for true Americans who support our nation's law enforcement officers. We strive to engage the public through political grassroots activity to support political interests that promote officer's interests. We are working to defeat anti-police sentiment and bring honor and respect back to the policing profession.
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SOURCE National Police Support Fund
