For Immediate Release
May 12th, 2023
(Alexandria, VA.) – After a thorough and comprehensive audit of Fiscal Years 2019 & 2020 by the Internal Revenue Service Tax Exempt/Government Entities division, American Veterans Honor Fund officially received a “clean bill of health” last week. The audit process and all of its findings are outlined below, all of which show that the organization is in good standing. American Veterans Honor Fund passed both operational and organizational tests based on all applicable IRS laws of 527 political organizations, 8871 and 8872 filings, organizational bylaws & governing documents.
Below is an outline of the IRS organizational test and operational test.
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.
“I am very proud of our organization and the work that we do, and it is great to be able to show what I have known about our organization since its inception: American Veterans Honor Fund operates with integrity and with deeply ingrained values. We have always operated ethically and under all of the regulations set forth by the IRS, and this has been vetted and shown within this audit process,” American Veterans Honor Fund’s President Al Quaye said in a statement.
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. These results are a huge vote of confidence in the effectiveness, transparency, and ethical leadership of American Veterans Honor Fund. In a statement made by James Skyles on the audit, he said “While the IRS auditing of 527 political organizations is unprecedented and it was a very strenuous process, it was also a great learning experience. I am pleased with the outcome of this audit for American Veterans Honor Fund, and they will continue to operate “as is,” per IRS instructions, and under the best practices of the sector.”
The IRS audit found that American Veterans Honor Fund should continue operating as is, as it is operating in full compliance with the law. The organization’s tax filings were accepted as is, with no excise tax or penalties attached to it. Everything that was listed as exempt activity was declared exempt by the IRS, with no changes or alterations required for direct or indirect exempt activities.
The Internal Revenue Service audit consisted of going through all financial statements, full review of every general ledger transaction; review of organizational governance, bylaws, and any conflicts; fundraising & consultant contracts; direct & indirect exempt activity conducted by the organization, and a full analysis of any federal activity. The auditor also reviewed fundraising contracts and fundraising materials/scripts. The Internal Revenue Service has documented in the process & final report to the organization that American Veterans Honor Fund was following all applicable laws and regulations ‘to a tee.’
As the Internal Revenue Service has determined, the American Veterans Honor Fund is fully compliant with all IRS laws and regulations. Further documentation and updates will be provided as the Internal Revenue Service provides them.
The mission of the American Veterans Honor Fund is to support those who’ve sacrificed and defended our Nation’s sovereignty and the freedom of the individuals who live here. We provide training, technology, and an experienced network of contacts, experts, and professionals dedicated to preparing our Veterans to serve in an elected capacity at the state and local levels of government. We give Veterans the opportunity and tools to fight against the corruption and mismanagement of our government from within.
Our vision is to become the preeminent proponent of Veteran politicians in the nation. We will strive to prepare dedicated Veterans from all military branches to continue their careers of service as elected officials at all levels of state and local government. We will accomplish this by: Creating a grassroots network of supporters to join in our mission, Bringing together experts to form think-tanks and policy committees, Funding the next generation of political leaders that meet our exacting standards of professionalism, discipline, and integrity, and Providing Veterans the opportunity and tools to fight against the corruption and mismanagement of our government from within.
President of American Veterans Honor Fund