Yep, it's the best detailed history of the NRA i've seen, and your two mentions did stand out. And of course both have neither gone unnoticed nor untested by others long before now. Obviously the social welfare organization status must lie 501(c)(4) legislation itself. Note the first amendment raises it's troublesome head again.
What would it take for the NRA to lose its tax-exempt status?
Janet Nguyen Jun 9, 2022
IMAGE -- As this year's NRA convention was underway in Houston, Texas, image of the number of mass shootings throughout 2022 was projected on the convention building. Bob Levey/Getty Images for MoveOn
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The National Rifle Association is a “social welfare organization” in the eyes of the Internal Revenue Service. Its 501(c)(4) designation means the NRA can endorse political candidates, engage in unlimited lobbying and allow its donors to remain anonymous. It also means it’s exempt from federal income tax.
Each heavily publicized mass shooting renews calls for gun reform, yet these attempts have failed to translate into substantive new legislation. The latest calls for reform come after a May 24 shooting, when a gunman entered an elementary school in Uvalde, Texas .. https://www.marketplace.org/shows/make-me-smart/lets-talk-about-the-mass-shooting-in-uvalde-texas/ , killing 19 children and two adults. Just 10 days earlier, another gunman killed 10 people at a supermarket in Buffalo, New York.
Without its tax-exempt status, the NRA would get taxed on its investment income at the corporate tax rate of 21%, potentially get taxed on its net income outside of investment income, and could also lose any exemptions it has at the state level, explained Lloyd Hitoshi Mayer, a law professor at the University of Notre Dame.
Experts, however, say that would be an uphill battle.
What would disqualify the NRA from its tax-exempt status?
While political groups have proposed different methods to nullify the NRA’s status and hold the group accountable for its actions, they’re likely to be ineffective.
“Groups of all sorts of persuasions and political positions” are classified as 501(c)(4)s, Mayer said. The federal government can’t choose which organizations are granted tax-exempt status based on their viewpoints because of the First Amendment’s .. https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status .. guarantee of freedom of speech.
“Both gun-control groups and the NRA, a gun-rights group, can be (c)(4)s,” Mayer said. “Pro-life and pro-choice groups can be (c)(4)s, environmental groups and anti-regulation groups can be (c)(4)s as long as what they’re promoting is not actually illegal.”
So for the NRA to lose its status, it would have to actively promote illegal activity .. https://www.irs.gov/pub/irs-tege/eotopicj85.pdf , like encouraging its members to violate gun laws, Mayer explained.
“Civil disobedience, in other words, would disqualify them from tax-exempt status,” Mayer said. The publication Vox argues that while the NRA uses inflammatory, “paranoid” rhetoric .. https://www.vox.com/world/2017/6/29/15892508/nra-ad-dana-loesch-yikes .. to bolster its message, its ads are never an “outright exhortation to violence.”
Mayer said that if gun companies were found to be running the NRA as a shadow lobbying .. https://sunlightfoundation.com/2016/04/19/what-is-shadow-lobbying-how-influence-peddlers-shape-policy-in-the-dark/ .. group — that is, doing lobbying work without registering as a lobbyist with the legislature — that might also warrant disqualifying the group from its tax-exempt status. The NRA conducts political activity through a lobbying arm called the Institute for Legislative Action and its political action committee, the Political Victory Fund, which donates money to candidates who support gun rights.
501(c)(4)s can also lose their status on the grounds of too much political activity (participating in political campaigns), which is different from lobbying (trying to influence legislation), Mayer said.
“And as politically active as the NRA is, it does a lot of other things. So it’s unlikely to be vulnerable in that regard, either,” Mayer said. The organization offers firearm training courses, provides gun ranges for its members and hosts expos.
In 2010, the Supreme Court’s Citizens United decision allowed 501(c)(4)s to run political ads .. https://www.marketplace.org/2013/05/13/are-501c4-nonprofit-groups-too-partisan/ .. about federal candidates and removed spending limits for corporations and unions on political donations. But there have been efforts to curb the involvement of 501(c)(4)s in politics.
The NRA has been facing financial trouble, which could reduce its tax liability if it were to lose its exempt status.
[Insert: NRA Watch Report [...]Put plainly, the NRA couldn’t even file bankruptcy correctly. It didn’t work. In its Chapter 11 filing, the NRA spent millions on legal fees only to get * Testimony in open court about rampant mismanagement. * Evidence of luxurious personal spending by LaPierre including his private jet travel paid for by the NRA and family trips on a yacht paid for by a stakeholder of a key NRA vendor. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171673521]
In a 2019 piece published in the New Yorker and The Trace, writer Mike Spies detailed the financial woes and infighting plaguing .. https://www.thetrace.org/2019/04/nra-financial-misconduct-ackerman-mcqueen/ .. the gun-rights group, including a breakdown in the relationship between the NRA and its public-relations firm, Ackerman McQueen.
“Even if they were a taxable corporation, they would be paying little to no tax anyway,” Mirkay said.
Mirkay said he thinks the organization would be able to survive, fight the revocation, and even rectify the issues within the organization that led to the loss of the status in the first place.
He pointed out that organizations are typically given an advance warning, with the ability to correct course.
But while its tax-exempt status seems safe for now, the NRA finds itself mired in lawsuits, with the top legal officers from both Washington, D.C., and New York pursuing action against the organization.
Mayer also pointed out that the NRA Foundation, a 501(c)(3), may be at risk even if the NRA itself isn’t. The District of Columbia’s attorney general is suing the NRA Foundation .. https://oag.dc.gov/release/ag-racine-sues-nra-foundation-diverting-charitable .. for allegedly “misusing charitable funds to support wasteful spending by the NRA and its executives.”
“If the money was misused, if it was a significant part of the NRA Foundation’s assets, that would be grounds for revoking the charitable status of the NRA Foundation,” Mayer said.
The office of D.C.’s attorney general says that the NRA was able to use the foundation to take on multimillion-dollar loans, including a $5 million loan the group hasn’t repaid, and accepted millions in fees without documenting how they’d be used for “charitable purposes.”
To hold these groups accountable, the office wants better policies to ensure the two groups remain separate, and supervision over their financial decisions.
Attorney General James Wins Trial Against NRA and Wayne LaPierre
Jury Finds NRA, Wayne LaPierre, Woody Phillips, and John Frazer Violated New York Law Wayne LaPierre and Senior Executive Ordered to Pay $6.35 Million for Causing Damages to the NRA
February 23, 2024
NEW YORK – New York Attorney General Letitia James today announced that the jury in her case against the National Rifle Association (NRA) and three current and former senior leaders has found the defendants liable for violating the law. The jury found that Executive Vice President Wayne LaPierre and former Treasurer and Chief Financial Officer (CFO) Wilson “Woody” Phillips were liable for financial misconduct and corruption in managing the organization. The jury concluded that LaPierre abused his position for his personal benefit and steered lucrative contracts to friends and relatives, including spending millions of organization dollars on lavish travel, private planes, expensive clothing, and more. LaPierre was found to have caused the NRA $5.4 million in damages and must pay $4.35 million. The jury also determined that Attorney General James has shown cause for removal of LaPierre from the NRA based upon his violations.
The jury also found that the NRA failed to properly administer charitable funds and violated state laws that protect whistleblowers. Phillips and the current General Counsel and Corporate Secretary John Frazer were found liable for failing to uphold their duties as nonprofit executives. Phillips was ordered to pay $2 million in damages. Frazer and the NRA were also found liable for making false statements on the NRA’s regulatory filings.
“This verdict is a major victory for the people of New York and our efforts to stop the corruption and greed at the NRA,” said Attorney General James. “For years, Wayne LaPierre used charitable dollars to fund his lavish lifestyle, spending millions on luxury travel, expensive clothes, insider contracts, and other perks for himself and his family. LaPierre and senior leaders at the NRA blatantly abused their positions and broke the law. But today, after years of rampant corruption and self-dealing, Wayne LaPierre and the NRA are finally being held accountable. We will not hesitate to pursue justice against any individual or organization that violates our laws or our trust, no matter how powerful they are.”
Over the course of a six-week trial, the Office of the Attorney General (OAG) presented evidence revealing the extent of the NRA and its senior leaders’ violations of the law and misuse of NRA funds. The evidence presented included:
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