Federal agents previously investigated the Southern Poverty Law Center's paid informant program for possible tax crimes, but the probe failed to yield any charges after Internal Revenue Service lawyers determined it was legally structured, sources familiar with the matter told CBS News.
Agents
from IRS Criminal Investigation in 2019 and 2020 homed in on shell bank
accounts that a former chief financial officer at the civil rights nonprofit
opened to pay informants in exchange for intelligence about hate groups. The
agents sought to determine whether the SPLC unlawfully failed to file tax
returns for those payments, sources said.
But a
Treasury Department rule exempts 501(c)(3) nonprofits from filing tax returns
in connection with payments to informants who provide information about
potential criminal activity. As a result, IRS lawyers later cautioned against
seeking an indictment on tax charges, several of the sources said.
A
spokesperson for IRS Criminal Investigation declined to comment. A spokesperson
for the Justice Department declined to comment beyond its filings in the
criminal case.
The tax
portion of the investigation, which has not been previously reported, was
initiated during President Trump's first term as an expansion of an FBI probe
into whether that same former chief financial officer may have embezzled money
from the SPLC, the sources said.
The
Justice Department in April obtained an 11-count wire and bank fraud indictment against the
SPLC over the center's informant program, alleging it defrauded its donors and
duped its banks by creating shell accounts to funnel money to insiders who
belonged to the same hate groups it pledged to dismantle.
The group
denies wrongdoing and has pleaded not guilty.
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