A far-left nonprofit attempted to skirt IRS tax law by amending its most recent publicly-available tax forms and flouting political advocacy rules for certain nonprofit organizations.
One Fair Wage, a progressive group devoted to raising the minimum wage, tweaked its 2022 tax filings to lower its total lobbying expenditures to stay within compliance for its 501(c)(3) nonprofit status, the tax documents show.
House Oversight Committee Chairman James Comer (R., Ky.) launched an investigation in February into the IRS’s lack of enforcement of tax laws against left-wing activist groups that flout lobbying restrictions for 501(c)(3) tax-exempt charitable organizations.
“The One Fair Wage campaign is the latest utopian wish list item from the radical left and would be disastrous for employers, employees, and the economy,” Comer told National Review in a statement. “As we have seen with other groups, the Committee is concerned with the IRS withholding enforcement actions for the political lobbying of certain activist groups. One Fair Wage cannot be allowed to continue to skirt the law and more must be done to rein in activist groups hiding behind tax-exempt status.”
After Comer launched his investigation, One Fair Wage amended its 2022 tax filing’s scheduled C section on limits on lobbying expenditures under the 501(h) expenditure test.
The IRS limits how much tax-exempt organizations can spend each year on lobbying and how much they can spend on grassroots lobbying, as opposed to direct lobbying efforts. If an organization exceeds its lobbying cap by 150 percent over a four-year period, it can put its nonprofit status in jeopardy.
Originally, One Fair Wage’s tax liability was roughly $100,000 and exceeded the 150 percent lobbying threshold of its total maximum permissible lobbying expenditures, potentially jeopardizing its nonprofit status.
Under the amended tax filing, One Fair Wage’s tax liability was a little more than $1,000 and did not threaten the group’s tax exemption, the original and amended tax documents show.
One Fair Wage did this by reclassifying its grassroots lobbying to direct lobbying and lowering its lobbying expenditures, while raising its total expenditures.
The activist group also appears to have lobbied for Vice President Kamala Harris in what could amount to a violation of IRS rules for 501(c)(3) organizations, which have less flexibility than 501(c)(4) groups when it comes to direct political advocacy for particular candidates.
On October 1, One Fair Wage sent out a fundraising email about reaching millions of restaurant workers to inform them that Kamala Harris supports higher wages. It cites a New Yorker article that quotes One Fair Wage’s president’s thoughts on Harris and former president Donald Trump’s attempts to court service workers.
The email, forwarded to National Review, says “we have an opportunity to reach 14 million restaurant workers showing that [Kamala] Harris supports One Fair Wage, which is what workers really need and want: a raise.”
“To this end, One Fair Wage Action is leading voter engagement with service workers in AZ, MI and PA, sharing the differences in the candidates’ stances on their wages – their highest priority issue,” the email adds.
It links readers to a donation page for its 501(c)(3) wing even though the email mentions the activist work by its 501(c)(4) side, One Fair Wage Action, to educate service workers on Kamala Harris’s minimum wage policy.
“One Fair Wage has a history of playing fast and loose with the facts, so it’s no surprise it may be taking that same irresponsible approach in other areas. The group should start listening to tipped workers and stop advocating for harmful tip credit elimination schemes,” said Michael Saltsman, executive director of the Employment Policies Institute, an economic research organization opposed to minimum wage increases.
Multiple attempts by National Review to reach One Fair Wage for comment via email last week were unsuccessful.
One Fair Wage’s spending practices have previously faced scrutiny. In Michigan, the organization’s 501(c)(4) advocacy arm faced an investigation over a suspected campaign finance violation for allegedly participating in a scheme to conceal donors to a campaign to put a $15 minimum wage on the ballot in 2022.
Contrary to One Fair Wage’s mission, Ohio employees have alleged they were not paid for their work during their campaign to get a $15 minimum wage on Ohio’s 2024 ballot.