* Today’s Sun-Times about how Congressman Dan Lipinski wants the Internal Revenue Service to investigate “a series of financial deals improperly [which] benefited the leaders of the Illinois Policy Institute” includes the best explanation I’ve seen so far about what’s being alleged…
“Federal law provides tax benefits that help nonprofits pursue their agendas, including ideological agendas,” Lipinski wrote to David Kautter, the acting commissioner of the IRS. “What it does not allow, however, is for an individual to use a non-profit organization to inure excessive benefits to himself. I fear that is exactly what Mr. Tillman has done.” […]
But experts in nonprofit tax laws told ProPublica Illinois and the Sun-Times that some of the transactions raised ethical and legal concerns. Among the list of potential red flags: a zero-interest, $49,400 loan from Think Freely Media, a nonprofit Tillman founded and served as board president, to Crowdskout, a for-profit data and marketing firm owned by a company he controlled.
That loan was essentially a gift, experts said.
“No loans are made on zero interest because you lose the inflation value. That means it’s a financial benefit to a for-profit business,” said Lloyd Hitoshi Mayer, a professor at the University of Notre Dame Law School. “Under federal tax law it’s called an excess-benefit transaction.”
Think Freely Media also made another $60,000 in loans to Crowdskout on which it collected interest. On other occasions, Think Freely Media gave grants to nonprofit organizations that hired Crowdskout or other companies in which Tillman had a stake.
Two things to remember: The conservative Lipinksi is in a primary battle against a liberal Democrat and Tillman denies all wrongdoing. Click here for his response.