Watchdog Files IRS Complaint Against Daily Caller News Foundation for Abusing Nonprofit Status
FOR IMMEDIATE RELEASE: June 17, 2020
Contact: Michael Clauw, mclauw@campaignforaccountability.org, 202.780.5750
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group focused on public accountability, filed a complaint with the IRS against the Daily Caller News Foundation alleging the nonprofit abused its tax-exempt status. The Daily Caller, a for-profit news publication founded by Tucker Carlson, and its related 501(c)(3) nonprofit, the Daily Caller News Foundation, appear to be violating nonprofit tax laws by, among other things, routing money and expenses through the nonprofit and engaging in political activities.
CfA Executive Director Daniel E. Stevens said, “The Daily Caller News Foundation is nothing more than a paper entity created to allow the Daily Caller to cash in on its tax-exempt status. The Daily Caller routes donations and expenses through the Daily Caller News Foundation to avoid paying taxes and subsidize its business. It’s time for the IRS to call out this farce for what is and put an end to the Daily Caller’s inappropriate reliance on its 501(c)(3) alter ego.”
The Daily Caller News Foundation purports to freely license its content to any media outlet. In effect, it is simply a content producer for the Daily Caller. The Foundation’s website claims that there are over 250 licensees in addition to The Daily Caller, but an analysis of content produced by the Foundation reveals that it is almost never picked up by other outlets.
The Daily Caller, however, relies heavily on content produced by the Foundation. For instance, on April 16, 2015, 20 out of 69 articles on the Daily Caller homepage were produced by the Foundation. On January 26, 2017, 25 out of 61 homepage stories were produced by the Foundation, including three of top five articles listed.
Because the Foundation acts like a subsidiary of the Daily Caller, its tax-exempt status benefits the for-profit organization. Donations made to the Foundation effectively subsidize the Daily Caller, and expenses incurred by the Foundation are exempt from taxation, another subsidy for the Daily Caller. Between 2014 and 2017, the Foundation received nearly $7.5 million in donations, which have been used almost exclusively to create content for the Daily Caller.
Additionally, since the Foundation and the Daily Caller are essentially intermingled entities, the Daily Caller’s political activities constitute violations of the Foundation’s tax-exempt status. In 2016, Donald Trump’s presidential campaign paid about $150,000 to rent the Daily Caller’s email list to solicit political contributions. The Daily Caller also rented its email list to several other political committees including the Republican National Committee and the Conservative Campaign Committee.
Finally, employees and executives of the Foundation have engaged in political activity in their official capacities. One contributor, Christianné Allen, produced videos for Daily Caller’s website while working concurrently with Donald Trump’s presidential campaign. Mr. Carlson, who is an officer of the Foundation, has voiced his political preferences in several pieces published by the Daily Caller.
Mr. Stevens continued, “Ironically, the Daily Caller recently published an article alleging a liberal nonprofit has illegally benefited the for-profit media company owned by its founder. Yet it’s clear that the Daily Caller News Foundation accepts donations to support the work of the Daily Caller. This improper arrangement is obvious to the Foundation’s donors, so should be immediately apparent to IRS investigators. The Daily Caller must abide by the same laws as every other news organization.”
Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.