U.S. Tax Court Rules GOP Funder Loren Parks Owes Taxes for Foundation's Political Spending

Loren Parks, the largest individual contributor in Oregon political history, lost a case this week in U.S. Tax Court.

On Nov. 17, the court found Parks, 89, liable for excise taxes on $639,000 his nonprofit foundation spent on radio ads for ballot measure campaigns between 1997 and 2000.

At issue was whether the Parks Foundation, a 501(c)(3) nonprofit entirely funded by Parks, a medical products manufacturer, could engage in political activity.

Parks was the sole funder of his organization, which meant in addition to being classified as a 501(c(3), it was a 509(a) foundation. The IRS is particularly wary of political spending, according to the Tax Court opinion:

The Parks Foundation spent money to communicate with voters about ballot measures, often involving public safety.

For instance, court records show the Parks Foundation spent $65,000 in 1997 to promote Measure 49, which would have expanded Oregon's prison industries.

For the ads, Parks hired Greg Clapper, whose folksy ads promoting political action committees with funny names were a staple on the Oregon airwaves for years.

Clapper called the Measure 49 PAC the "Are You Having Trouble Hearing What We're Saying Committee?"

Neither the Internal Revenue Service nor the U.S. Tax Court bought Parks' argument that the political spending should be tax-free, and now he'll have to pay the IRS about 10 percent of the $639,000 he spent on the ads—plus interest—in excise taxes.

Willamette Week