Senator Chuck Grassley (R-Iowa) fired off a letter to the IRS this week, advising the agency to stay out of drama over whether the National Rifle Association should lose its tax-exempt status due to its purported ties to Russia.
The admonition from Grassley came in response to a letter that Sens. Ron Wyden (D-OR) and Chuck Schumer (D-NY) wrote to the IRS asking it to look into the NRA’s tax-exempt status following a report from the Senate Finance Committee Democratic minority staff that investigated the relationship between the NRA and the Russian government.
This came after the NRA’s relationship with foreign agent Maria Butina and Russian government official Alexander Torshin was made public, along with a controversial 2015 trip to Moscow made by NRA board members and backers. Wyden has asserted that the Russian government was using the pro-gun group to access the U.S. political system ahead of the 2016 election.
Grassley referred to Wyden and Schumer’s letter as one “that demonstrates nothing that reasonably calls into question the organization’s tax-exempt status under the law. Rather, the request appears to be a partisan one. The IRS is not a political weapon, and it should not be used as such.”
“After reviewing nearly identical evidence as the Minority staff at great length, it was clear to the Majority staff that nothing in those documents reasonably raises questions about whether the NRA should maintain its tax-exempt status under the tax code,” Grassley said. “Indeed, rather than present a careful and serious analysis, the Minority staff report offers incendiary conclusions unsupported by paragraphs full of belabored references to behavior that ‘raises serious’ but undefined concerns.’”
‘The NRA lied’
Last month, Wyden had tweeted in a lengthy thread: “The NRA lied about the December 2015 Moscow trip not being an official trip. NRA leaders were told the trip was needed to prove Torshin’s American connections to the Kremlin, and that building relationships with Russians was ‘NRA business.’”
However, the committee’s Republican majority staff released their own report, as well. “This Majority finds no wrongdoing by the NRA or its officials that would reasonably call into question the NRA’s tax-exempt status, based on the documents provided to the Committee,” it said.
Days later, though, Wyden and Schumer wrote their letter to the IRS commissioner, Charles Rettig, asking him audit the NRA’s tax-exempt status, based on the conclusions of the minority report.
The report “raises concerns about potential private inurement and use of exempt resources for non-exempt activities,” the letter said. “Evidence in the report confirms that some members of the NRA delegation participated in the Moscow trip primarily or solely for the purpose of advancing personal business interests, rather than advancing the NRA’s tax-exempt purpose.”
‘Yet another politically motivated investigation into the NRA’
According to The New York Times, the NRA stated that it didn’t agree to pay for all of the Moscow trip’s expenses “but emails show that there was confusion long afterward about who was supposed to pay for what.” As a result, however, the New York Attorney General Letitia James is leading an investigation into whether or not the NRA violated its tax-exempt status because of how it potentially used donor funds.
“The facts investigated by the Minority in the Finance Committee regarding the NRA and detailed in its report do not lend themselves to serious questions about whether the NRA has remained faithful to its non-profit purpose in recent years,” Grassley said.
“Predictably, the report by Senate Finance Committee Democrats is being used to justify yet another politically motivated investigation into the NRA,” said William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to the NRA, in a statement to Yahoo Finance. “This partisan investigation was fueled by unfounded allegations obviously driven by the Minority’s dislike of the NRA’s political point of view. The exercise should raise concerns about an abuse of government power and waste of taxpayer funds. Fortunately, for the NRA and all advocacy groups, political speech is protected by the First Amendment of our Constitution.”
Speaking more broadly about the NRA, Brewer said, “The Association’s financials are audited and its tax filings are verified by one of the most reputable firms in the world. The NRA is committed to utilizing best practices in the areas of accounting and governance.”
The IRS did not respond to request for comment regarding this controversy.
‘The IRS should never investigate taxpayers’
In his letter, Grassley referred to the scandal that plagued the IRS back in 2013 — when the organization admitted that it targeted groups with the terms “tea party” or “patriot” in their names when applying for tax-exempt status — as “a tragic episode in the IRS’ history and it must not happen again.” (These were conservative, non-profit groups.)
“The IRS should never investigate taxpayers as a result of potential political motives,” Grassley said. “It is critical for the administration of our tax system that the IRS remain ideologically neutral when it comes to enforcing the tax code, and it is just as critical that taxpayers all throughout the United States know and believe this to be true.”
Grassley stressed that the IRS does important work, and “in order for this important work to maintain its legitimacy, the American public must believe the IRS is not, or might not become, biased against them based on the exercise of their constitutional rights.”
“I suspect most Americans do not enjoy receiving correspondence from the IRS but I also suspect most Americans do not think the IRS would ever contact them because of their political beliefs,” Grassley said. “For the sake of our institutions and for the sake of our tax code, I hope this qualification stays that way. Americans’ confidence in our tax system depends on it.”
Adriana is an associate editor for Yahoo Finance. Follow her on Twitter @adrianambells.