For Immediate Release
American Police Officers Alliance is told to “continue operations as is” after a comprehensive IRS audit covering 2019-2020 finds all organization operations and finances in good standing
[ARLINGTON, VA.]- American Police Officers Alliance received a “clean bill of health” last week from the Internal Revenue Service after a thorough audit of the organization’s 2019 and 2020 fiscal years. A letter was provided to the grassroots political organization by the IRS outlining the audit process and all of its findings, all of which show that organization is in good standing in all facets. The audit was conducted by the TE/GE division of the Internal Revenue Service.
American Police Officers Alliance passed both organizational and operational tests, which are outlined below:
To be subject to tax only as a political organization under IRC Section 527, a political committee, association, fund, or other organization must meet both:
– The organizational test of Treas. Reg. 1.527-2(a)(2).
– The operational test of Treas. Reg. 1.527-2(a)(3).
To satisfy the organizational test, the organization must have the primary purpose of carrying on exempt function activities as defined in IRC Section 527. The organization does not need a formal charter or to be a corporation, trust, or association.
The organization must use a separate bank account to deposit and disburse political campaign. Rev. Rul. 79-11, 1979-1 C.B. 207.
When there are no formal documents, review the Form 8871 purpose statement.
Consider statements of the organization’s members at the time it was formed that they intend to operate the organization primarily to carry on exempt function activities. Treas. Reg. 1.527-2(a)(2).
All organizations claiming exemption under IRC Section 527 are required to obtain EINs, even if they have no employees.
To satisfy the operational test, the organization’s primary activities must be exempt function activities as defined in IRC Section 527. The organization may engage in activities that are not exempt function income activities, but these may not be its primary activities. Treas. Reg. 1.527-2(a)(3).
IRC Section 527(e)(2) defines “exempt function” as “the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected or appointed.”
Promoting the nomination of an individual for an elective public office in a primary election, or in a meeting (or caucus) of a political party is also an exempt function activity. Treas. Reg. 1.527-2(a)(1).
For tax years beginning after December 31, 1986, the exempt function of a political organization also includes making expenditures for a public office that would be allowable as a deduction under IRC Section 162(a) if incurred by the office holder.
Political organizations can continue to qualify under IRC Section 527 between elections even though not supporting a particular candidate, if engaged in activities related to and supporting the selection process.
The Skyles Law Group from Chicago represented the organization in the detailed audit that was exhaustive and lasted almost 6 months. This process cost the organization an extensive amount of time, labor, and money to complete. American Police Officers Alliance worked closely with the IRS agent assigned to this audit. The organization came out with an “all clear” on all of its governance, finances, and exempt activities and programming. These results are a huge vote of confidence in the effectiveness, transparency, and ethical leadership of American Police Officers Alliance.
“The IRS has confirmed that American Police Officers Alliance has been operating within the confines of the law,” James Skyles of the Skyles Law Group said in a statement. “This has been a great learning experience on best practices and the organization will continue to implement even stronger best practices and to raise its own standards moving forward.”
“It is great to hear from the IRS that we have been given a clean bill of health. These results will put to rest any rumors or misconceptions that we do not follow IRS rules with regards to compliance. We will continue our mission to help stand with police officers in a time when they are under constant attack from the mainstream media,” Executive Director Daniel Stuebs commented.
The full audit included the examination, review and analysis of American Police Officer’s Alliance finances and governance, including:
- Full financial statements
- A review of every general ledger transaction
- All tax returns since the organization’s inception
- Board governance & bylaws
- Board of Directors potential & real conflicts
- Fundraising & consultant contracts
- Direct & indirect exempt activity
- Analysis of any federal activity
This outcome should also be a comfort to all donors, stakeholders, staff and vendors that as a political organization, American Police Officers Alliance is raising and spending funds in accordance with IRS political organization statutes organized under Section 527 and that the organization will be able to continue forward with fulfilling our mission to support our law enforcement within the political process. Thank you to all of our donors and grassroots supporters that have helped build our organization and pro-police movement. The work we have been able to accomplish over the last 6 years is all thanks to you.
American Police Officers Alliance will provide further documentation and updates as they are provided by the Internal Revenue Service.
The mission of American Police Officers Alliance is to help elect local leaders who respect and understand the decisions police officers are forced to make each day, and to fight for their rights and ensure that police officers are receiving the support, tools, training, and compensation they need and deserve so they can remain safe as they protect us. The vision of the organization is to fight for those who protect our nation’s citizens, including ensuring that police officers maintain their benefits such as retirement pensions and protect their rights from government and politicians that are blatantly anti-police. American Police Officers Alliance will work to ensure that our officers have the best local leadership possible, which means working to defend strong police leadership and interests in our nation’s cities and working to elect officials who will stand up for our police force.