Two members of Congress composed a letter to the Internal Revenue Service (IRS), asking for an investigation regarding the tax-exempt status of the Hollywood Foreign Press Association citing claims of “seemingly corrupt and unacceptable deal making” by the group that manages Golden Globe awards.
The letter was dated March 7, as reported by The Wrap.
Charles Rettig, the commissioner of the IRS, received the letter from Rep. Joyce Beatty of Ohio, and Rep. Brenda L. Lawrence who represents Michigan. Both women are members of the Congressional Black Caucus.
In Beatty and Lawrence’s letter, the representatives discuss the “longstanding and questionable business practices” by HFPA leadership.
“As members of Congress with oversight of our federal laws and statutes, we believe the well documented and credible criticism of the HFPA and its current leadership is worthy of an investigation by the IRS of their 501(c)(3) nonprofit status,” Beatty and Lawrence wrote.
“For more than a year, entertainment and national media outlets have detailed the seemingly corrupt and unacceptable deal making patterns of HFPA raising questions whether the organization solely responsible for awarding the once coveted Golden Globe Award is meeting its IRS section 501(C)(3) demands,” stated the letter which appears on The Wrap‘s website.
“We believe at minimum, HFPA’s current leadership has colluded to benefit themselves, either directly or indirectly and therefore violated the IRS statute.”
HFPA has been under scrutiny from the press as of late, and the letter cited investigative reports from outlets including The Los Angeles Times, Variety, USA Today, and Newsweek to further indicate the organization’s failure to incorporate diversity and inclusion practices.
“The apparent lack of transparency, standards and failure to implement organizational reforms has also attracted the public ridicule of major film companies such as Amazon, Netflix, and Warner Bros.,” reads the letter obtained by The Wrap. “In a March 2021 Variety article, which highlighted a letter sent to HFPA, a coalition of more than 100 public relations executives called on the nonprofit to “eradicate the pervasive practice of unprofessionalism, ethical impropriety, and alleged financial corruption endemic to the organization.”
Although the legislators refer to HFPA as holding 501(c)(3) status, the organizations tax returns from 2017 indicate it is a 501(c)(6), The Wrap reported.
According to the IRS, a 501(c)(6) does have tax exempt status and “provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”
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