U.S. Reps. John Moolenaar (R-MI) and Jason Smith (R-MO) are calling for an investigation into tax-exempt U.S.-based organizations with ties to the Chinese Communist Party (CCP), as well as part of China’s United Front influence operations in the United States.
“The People’s Republic of China (PRC) is utilizing United Front organizations, proxies, and intermediaries within the United States — many granted tax-exempt status under section 501(c) of the Internal Revenue Code — to engage in political activity that manipulates our democratic institutions and supports the interests of the CCP,” wrote Rep. Moolenaar and Rep. Smith in an April 8 letter sent to the heads of the U.S. Department of the Treasury and the Internal Revenue Service.
Rep. Moolenaar, chairman of the U.S. House Select Committee on China, and Rep. Smith, chair of the U.S. House Ways and Means Committee, pointed to an investigation conducted by The New York Times that identified at least 53 of these organizations that have endorsed or raised money for political candidates, likely in violation of the rules against political campaign intervention, with at least 19 of those registered charities being in clear violation of the ban, according to their letter.
The IRS declined to comment on these findings, and New York’s state tax agency admitted it lacked the resources to identify such violations, the lawmakers wrote.
Additionally, the Ways and Means Committee has conducted extensive oversight into the exploitation of America’s tax-exempt sector by foreign nationals, with particular focus on CCP-linked influence operations.
Most recently, the lawmakers wrote that on Feb. 10, the committee held a hearing on foreign influence in America’s tax-exempt sector, and Rep. Smith simultaneously transmitted letters to The People’s Forum, BreakThrough News, and Tricontinental: Institute for Social Research, which are organizations alleged to form part of a network of CCP-linked nonprofits funded by American tech mogul, Neville Roy Singham, demanding the production of documents and raising serious questions about their tax-exempt status.
“Public reporting and cases that are being prosecuted by the Department of Justice throughout the United States provide chilling evidence of how the Chinese government and CCP United Front have utilized and coopted community associations and other types of cultural, civic, and business organizations purportedly representing the interests of diverse communities across the United States to engage in political activities,” wrote the lawmakers.
And while Rep. Moolenaar and Rep. Smith noted that they appreciate the IRS’s commitment to stronger enforcement of laws against activities by tax-exempt organizations that violate the Internal Revenue Code, they think it’s critical to include in the process a thorough review of how tax-exempt organizations in the U.S. that are influenced by foreign adversaries like the PRC are violating U.S. laws and engaging in prohibited political campaign interventions that undermine democracy and the integrity of the tax-exempt status for other organizations that are engaging in legitimate charitable purposes.
They requested a briefing by April 22 on the steps that the IRS is undertaking to address these threats.