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Richardson’s PAC files as tax-exempt, but is it in time?
Glenn Richardson‘s political action committee registered as tax-exempt Tuesday, but it remains unclear whether that will defuse an investigation into his six-figure transfer of campaign cash to the committee.
Richardson moved $219,915 from his election account to MMV on Dec. 31, a day before resigning as a state legislator and as speaker of the Georgia House of Representatives. The State Ethics Commission launched a preliminary investigation into the transaction last week because MMV did not appear to have an IRS tax exemption or non-profit status with the Georgia secretary of state.
Georgia law allows political campaigns to distribute excess funds four ways: to a tax-exempt, non-profit organization, to another candidate or political party, to a future campaign for the same office, or as refunds to the original donors. Political action committees such as MMV must file for tax-exempt status and do not automatically qualify.
MMV filed paperwork with the IRS on Tuesday to become a tax-exempt political organization under the federal tax code. That could keep future contributions from being taxable but apparently would not cover previous contributions — including the $219,915.
According to an IRS fact sheet:
Unless excepted … a political organization must file Form 8871, Political Organization Notice of 527 Status, with the IRS to be tax-exempt. Until it files the form, its income (including contributions) is subject to taxation. Form 8871 must be filed electronically, within 24 hours of the political organization’s establishment. An amended Form 8871 must be filed within 30 days of any material change (including termination), or any income (including contributions) it receives after the material change will be subject to taxation.
The Ethics Commission would also have to answer a separate question: Does a tax-exempt filing in February cover the transfer of a couple hundred thousand dollars five weeks earlier?
Richardson did not return a telephone call and e-mail seeking comment.
MMV’s IRS filing lists Richardson as the custodian of its records at the address of his loft in downtown Atlanta. IRS rules require 527s to keep their paperwork publicly available for inspection and copying at their principal place of business. So, we surmise, you could go knock on his door if you want to see ’em.