IRC 527 Proves Musk’s Million Dollar Voter Harvesting Illegal

Even non-experts smell a rat in Musk paying $1 million dollars per day to a random voter registrant who also signs a pledge to vote for Trump. Musk is hardly hiding the intention.  To be eligible voters must register and sign a pledge to support positions that only Trump takes in the election.  Election law experts and DOJ have weighed in on the clearly illegal scheme.  But the best way to know that what Elon is doing violates federal laws prohibiting paying people to register, or paying people to vote for a particular candidate is by understanding IRC 527. By the way, even if you pay only one randomly selected person a million dollars, you are still paying someone to register or to vote for particular candidate if people are only eligible upon registration or after signing a pledge to vote for platform adopted by a candidate. That’s what Musk is doing right out in the open.  The outright bastardly fascist arrogance of it is breathtaking, I swear.   He’s doing it right out the open without a hint of shame.

Wikipedia reports that America PAC, the organization through which Musk makes the random payments, is a 527 political organization.  That means Musk necessarily violates those federal prohibitions.  Why? Because to be a 527, the organization perforce operates to get Trump elected.  That is its “exempt function.” All of America PAC’s spending, including the million dollar “lottery,” must be for the purposes of electing Trump as a matter of tax law.  So the simple fact that the lottery is administered via the 527 PAC, proves it is intended for the purpose of buying registrants or Trump votes.  A 527 can have no other purpose but to support a candidate.  Ultimately, by use of a 527 organization, Musk admits the purpose and its illegality under non-tax federal laws. 

Here is a very brief summary of IRC 527, taken from page 445 of our casebook:

Prior to 1975, there was an uncertainty regarding the proper tax treatment of political parties, campaign committees, and other organizations that primarily worked for the election of persons to public office.  The Service did not require such organizations to file tax returns nor pay tax on their income, because it believed that the income was composed entirely of nontaxable gifts.  In 1968, however, the Service became concerned that these political organizations were earning income through ordinary trades and business, and also making expenditures for individual personal benefit rather than in an effort to influence elections.  In Revenue Procedure 68-19, 1968-1 C.B. 810, the Service announced that amounts expended by political organizations for the personal benefit of a political candidate will constitute taxable income to the candidate.  It subsequently stated, in Announcement 73-84, 1973-2 C.B. 461, that it would begin requiring political organizations to file tax returns and pay tax on investment income, income from any ancillary commercial activities, and gains from the sale of appreciated property.  However, it also stated that it would not enforce the requirements of Announcement 73-84 until Congress had an opportunity to consider the matter.  Congress subsequently enacted IRC 527.

IRC 527 tracks the Service’s early thinking.  Donations (for which income tax deductions are not granted) are exempt from tax only if used to get somebody elected.  Musk’s reported $45 million donation would be taxable to the corporation unless it is segregated and used to get Trump elected.  Which must be what America PAC is using the lottery for.  Musk’s compliance with 527 necessarily proves his violation of federal election laws with regard to the million-dollar lottery.

Darryll k. jones