July 14, 2000
Mr. James K. Robinson
Assistant Attorney General
Criminal Division
U.S. Department of Justice
950 Pennsylvania, NW
Washington, DC 20530-0001
Ms. Paula M. Junghans
Acting Assistant Attorney General
Tax Division
U.S. Department of Justice
PO Box 813
Ben Franklin Station
Washington, DC 20044
Mr. Robert J. Conrad, Jr
Campaign Finance Task Force
U.S. Department of Justice
950 Pennsylvania, NW
Washington, DC 20530-0001
Honorable Louis J. Freeh
Director
Federal Bureau of Investigation
J. Edgar Hoover Building
935 Pennsylvania Ave, NW
Washington, DC 20535-0001
Re: National Education Association's Failure to Report Political Activities on its Federal Tax Returns Beginning With 1994 Return
Dear Messrs. Robinson, Conrad, Freeh, and Ms. Junghans:
Landmark Legal Foundation is bringing to your attention for investigation and possible prosecution evidence of an apparent violation of Title 16, Sections 7201, 7203, 7206, and 7207 - the crimes of attempting to evade or defeat tax; willful failure to file return, supply information, or pay tax; fraud and false statements; and submitting fraudulent returns, statements or other documents - by the National Education Association ("NEA").
On June 23, 2000, Landmark submitted a complaint to the Internal Revenue Service ("IRS") presenting extensive evidence indicating that the NEA has been and continues using tax exempt funds for political expenditures without reporting those expenditures to the IRS as required by law. Landmark's complaint, and the exhibits thereto, are being provided to you along with this letter.
In addition, we are enclosing a copy of an Associated Press story relating to the information Landmark has provided the IRS, which quotes two former senior IRS Exempt Organizations Division directors who confirm that the information presented in the complaint raises serious questions regarding the NEA's compliance with the law.
Moreover, the fact that the NEA's pervasive and unreported political activities appear to have been conducted over the course of several years raises serious questions about the IRS's administration and enforcement of the nation's tax laws. Set forth below is a summary of the relevant laws requiring your attention.
IRC 6001 requires every person liable for any tax imposed by the tax code, including exempt organizations such as the NEA, to "keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary [of the Treasury] may from time to time prescribe." Exempt organizations are required to file an annual return,
stating specifically the items of gross income, receipts, and disbursements, and such other information for the purpose of carrying out the internal revenue laws as the Secretary may by forms or regulations prescribe, and shall keep such records, render under oath such statements, make such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe . . ..
IRC 6033(a)(1).
Failure to comply with the IRC's reporting and record-keeping requirements subject an exempt organization to civil and criminal penalties under the IRC. See IRC Sections 6652 (Failure to file certain information returns); 6662 (Imposition of accuracy-related penalty); 7201 (Attempt to evade or defeat tax); 7203 (Willful failure to file return, supply information, or pay tax); 7206 (Fraud and false statements); and 7207 (Fraudulent returns, statements or other documents). Moreover, any return, declaration, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall contain or be verified by a written declaration that it is made under penalty of perjury. IRC 6065. While it is the taxpayer's obligation