Watchdog Group Calls on IRS to Investigate Re-Branded TX ACORN Branch

After James O’Keefe and the late Andrew Breitbart’s exposés effectively put the liberal community organizing group ACORN out of business, various former ACORN chapters have undergone extreme makeovers, branding themselves with different names and different mission statements. 

But underneath all of the cosmetic changes, ACORN’s principles and spirit remain the same. 

The latest, according to the taxpayer watchdog group Cause of Action, is ACORN’s former Texas chapter, which is using “a new name and a scheme to collect donations and divert them for political use in a way that abuses tax laws governing charitable organizations.” 

Cause of Action has called on the I.R.S. to formally investigate the Texas Organizing Project Education Fund (TOP ED) for funneling money to the Texas Organizing Project (TOP), the former ACORN chapter, that was used to fund political activity, like soliciting support for Democrats in Texas who are running for office like Mary Ann Perez, as reported by FOX News. This, according to Cause of Action, potentially violates the group’s tax exempt status, which forbids them from engaging in any direct political activity. 

In a letter to the I.R.S., Cause of Action officials wrote that “TOP is the reconstituted ACORN in Texas,” and formed “after ACORN became subject to public scrutiny, and eventually filed for bankruptcy.” According to Cause of Action, ACORN “re-branded many of its state chapters in order that those organizations could continue pursuing ACORN’s goals.”

“Fiscal sponsorship [has allowed TOP and TOP ED] to use a loophole in the tax code to engage in improper political activities under the radar of the IRS,” Dan Epstein, executive director of Cause of Action, told FoxNews.com. “Cause of Action is asking the IRS to investigate these groups for potential abuses of their tax-exempt status, and to hold them accountable for any violations they find.”

According to the report, TOP ED “gave nearly 80 percent of its revenues — approximately $640,000 — to the advocacy group in 2010.”

“While fiscal sponsorships are legal, it is not legal for a 501(c)(3) organization, such as TOP ED, to give any money to an organization that engages in political activity, without triggering various tax consequences,” Cause of Action wrote in its letter to the I.R.S. 

The letter also states that “the activities and interest of the TOP are similar and aligned with that of ACORN, as TOP acknowledges on their website,” and “because TOP is not a 501(c)(3) organization and is a fiscal client of TOP ED, the Internal Revenue Code imputes the activities of the fiscal client to the fiscal agent; any organization that acted as a fiscal sponsor for TOP therefore engaged in political activity if TOP engaged in political activity.”