Case Could Slash Donations To Environmental Groups

Washington, D.C., June 22, 2001 (ENS) - In what will be a test case of whether many environmental groups are violating tax laws, the Frontiers of Freedom announced today that it has filed a complaint with the Internal Revenue Service against the Rainforest Action Network (RAN) to deny the group its tax exempt status.

RAN, a nonprofit corporation established as a Section 501(c)(3) educational organization, has violated tax laws by engaging in pressure campaigns, boycotts and direct action protests, Frontiers charges. These activities are not educational, the lawsuit argues, but instead constitute advocacy activities.

That would require RAN to file as a Section 501(c)(4) organization - and forgo tax exempt status.

"It's obvious that RAN wants to have it both ways," said George Landrith, Frontiers of Freedom's executive director. "It wants to operate as an advocacy group but enjoy tax exempt status so it can rake in tax deductible contributions. The end result is that taxpayers subsidize protests, boycotts and pressure campaigns. The law was designed to ensure that these types of activities would not be tax exempt."

Landrith noted that many nonprofit groups, such as the conservative Frontiers of Freedom organization and environmental organizations such as the Sierra Club, set up separate educational and advocacy organizations to comply with tax laws.

RAN executive director Chris Hatch says he suspects the timber industry, particularly logging giant Boise Cascade, is behind the legal action.

"The timber industry is attacking not just RAN, but the First Amendment itself," said Hatch. "Boise Cascade is attacking RAN because we have exposed its destruction of the world's last remaining old growth rainforests. As for the anti-environment activists, they are trying to scare our funders. Let there be no doubt: the work to protect our forests will not only continue, but escalate."

In its complaint to the IRS, Frontiers says: "While people have every right to form groups and forcefully express their opinions, RAN's founders chose to organize RAN as a nonprofit dedicated solely to educational purposes in order to have access to tax deductible contributions. ... For taxpayers who are footing the bill for advocacy activities they may not support, this is an unacceptable arrangement. It is also clearly prohibited by law."

"Losing its tax exempt status could seriously jeopardize RAN's funding," Landrith said. "But that's the price you pay for advocacy. Other radical groups could eventually lose their tax exempt status as well. This could have a profound impact on radical environmentalist groups that are skirting our nation's tax laws. This will force them to find legitimate ways to raise money - and that won't be easy."

The complaint to the IRS can be read online at: https://www.ff.org

 

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