SAN FRANCISCO--(BUSINESS WIRE)--This morning the California Attorney General was asked to review public documents to determine whether Los Angeles-based AIDS Healthcare Foundation violated its non-profit status by spending nearly $7 million on political campaigns and whether its tax filings underreported this amount.
"We are constantly asked how a tax-exempt, non-profit can continue to spend millions of dollars to fund political campaigns and lobbying without violating tax law," stated Jeffery Douglas, Chair of the Free Speech Coalition, who submitted a letter to the Attorney General.
"We finally decided to review public records and it appears that their tax filings and campaign reports are in conflict. And by spending $7 million since 2012, and over $2 million so far this year, it appears that they could lose their non-profit status. We simply want the legal experts to review the public documents."
Tax-exempt 501(c)3 organizations the size of AHF are permitted to spend up to $1 million a year on political or lobbying activities. Any excess is subject to a 25% tax penalty. However if a non-profit spends more than $6 million over a 4-year span, the IRS can revoke tax-exempt status completely. AHF also has been granted non-profit charity status in California.
In 2012 AHF reported to Los Angeles County $2.3 million in monetary and non-monetary expenditures as the sole funder of Measure B, which required condoms to be worn in all adult films. However, AHF's publicly available tax returns report only $1.6 million for ALL of its political expenditures In 2012 including state and federal lobbyists. Public records show at least $2.7 million in political expenses for that year.
"It appears that AHF's obsession with the adult film industry has led them beyond allowable tax-exempt activities, and spending limits. This is money that should have been spent on providing healthcare to those in need," Douglas commented. "It would be a shame if this obsession cost AHF its non-profit status."