DNC host committee flagged by IRS, getting creative in response

With one week until Philadelphia hosts the Democratic National Convention, the IRS has denied an application by the DNC’s local fundraising arm for tax-exempt status.

The DNC host committee will not say why its application for 501(c) 3 status was rejected and a spokeswoman declined to make public the denial letter from the IRS.

David L. Cohen, Comcast senior executive vice president and advisor to the host committee, told the Philadelphia Inquirer its work was seen as “political activity” and therefore, could not receive a tax exemption. The Republican National Convention’s host committee in Cleveland was granted 501(c) 3 status. Cohen said Philadelphia’s application was “for all intents and purposes identical” to Cleveland’s and the host committee is appealing the IRS’ decision. 

“I don’t think there’s any basis for the IRS not to grant 501(c) 3 exemption to the host committee,” Cohen said. “I still hope they’ll do it, but we’re in a position in we’ve got a convention starting in eight days and we just couldn’t wait anymore.”

Cohen said the decision only affected 25 individual (as opposed to corporate) donors who gave less than $4 million combined. In the meantime, those looking for a tax write-off have been asked to send their gifts to the Philadelphia Convention and Visitors Bureau Foundation, which will make grants to the host committee.

Despite the fact two donors have asked for their money back, Cohen insists the IRS’ decision has had no impact on the effort to raise $60 million to cover the costs of the event.

Spokeswoman Anna Adams Sarthou said the host committee has raised $55 million in cash and “hard commitments” and has less than $3 million left to raise. 

This is a corrected version of this story. A previous version incorrectly stated how much money the host committee has raised so far.