Premium Essay

Personal Use of Campaign Contributions

In:

Submitted By melanice09
Words 521
Pages 3
TO: Partner FROM: Student
RE: Candidate Feldman (tax year 2010)

Facts
Our client, Candidate Feldman, ran for Congress in 2010 and raised $4.7 million for the campaign. Five months after his opponent was sworn into office, auditors discovered that Feldman used $500,000 of campaign donations for a personal vacation taken immediately after the unsuccessful campaign.

Issue
Has Feldman understated his income by using campaign contributions for a personal vacation after the election?

Conclusion
Yes, since Feldman’s personal vacation expenses cannot be excluded as campaign contributions, the $500,000 should be included as taxable income on his individual return.

Analysis
The $500,000 used for Feldman’s vacation is treated as income and subject to taxation because the contributed amount was not used for the political campaign. Instead, the money was diverted towards the personal use of the candidate under §527(d)(1) of the Internal Revenue Code. According to U.S. v. Jett, since personal expenses were incurred after the unsuccessful campaign season, the contributions used to cover the vacation cannot be excluded from income. If the travel expenses were obtained to generate proceeds during the campaign from membership dues, a political fundraiser, an entertainment event, or sell of political paraphernalia, then the amount would be excluded from the candidate’s individual return as income based on §527(c)(3). Considering Jett, if Feldman received the $500,000 as a gift as opposed to a political contribution, the amount would be excluded from gross income under §102(a) even though it .
However, Feldman’s increase in net worth by $500,000 is directly related to campaign funds, and the amount cannot be excluded from his gross income according to U.S. v. Scott. Scott is an appeal of the United States District Court for the Northern District of

Similar Documents

Free Essay

Ex-Senator, Now Business Lobbyist - Ethical Questions of Use of Campaign Funds

...Influencing the Political Environment Issue On the heels of an investigation of Senator Torricelli by the Senate Ethics Committee for accepting campaign gifts from a contributor, Torricelli abandoned his 2002 reelection bid for U.S. Senate. Upon retirement, the ex-senator retained $2.9 million of remaining reelection campaign contributions. Torricelli quickly drew criticism because of his decision to contribute $65,000 of remaining funds to politicians who had influence over his personal business interests. Although Torricelli did not violate specific campaign financing laws, watchdogs argue loopholes allowed him to use campaign funds in ways they weren’t intended. Enforcing Campaign Finance Legislation In response to allegations of inappropriate use of campaign funds by Torricelli, the National Republican Senatorial Committee requested the Federal Election Committee apply current regulation of campaign finances. Under the current guidelines if a Senator does not seek reelection, they do not have legal authority to retain or make use of contributions. Instead, funds should be returned to the contributor. Rather than add more severe limits on how retired politicians use campaign funds, the current regulation of returning funds to contributors should be strictly enforced. Repairing the Revolving Door The Torricelli case is a strong example of the revolving door, as he was a senator who immediately began lobbying when he left office. This case and a number of recent...

Words: 451 - Pages: 2

Free Essay

Corporate Contributions to Political Campaigns

...Jed Pickett Corporate Contributions to Political Campaigns Craig Allen SOC 120 Introduction to Ethics and Social Responsibility January 7, 2013 The recent election has got the blood boiling of many voters. Corporate contributions have become a major problem in the United States and affected and have affected many elections. I would like to discuss how money and greed can affect the decision of any candidate and cause them to betray their own personal beliefs and cause the betrayal to the people that they represent. I will also look at the issue using classical ethical and contemporary ethical theories, as well as looking at the issue through the view of utilitarianism. Any corporation should not be able make any contribution towards a campaign because then their ideas could become the candidates ideas even if a candidates is strongly against a subject that the corporation supports. We are going to look at the issue from the point of view of utilitarianism. Utilitarianism is a classical form of ethics that I will use to look at this issue. First off utilitarianism is described in our text book as a natural way to see if an act is the right thing to do or the wrong thing to do is to look at the consequences or the results of that action. (Mosser 2010) Looking at corporate contributions and seeing the type of candidates that the American people are being offered I believe that the corporations should not be allowed to contribute to a campaign. I do not see a problem, however...

Words: 3007 - Pages: 13

Free Essay

American Government

...Chapter 14 1. During the nomination campaign, the candidates target party leaders and interest groups. This is the time for the candidates to learn that a single phrase could end the campaign or guarantee a defeat. The media take much less notice of mistakes at this time than in the general election campaign. A danger not always heeded by candidates during the nomination campaign is that a candidate can move too far left or right and appear too extreme to the electorate. If a candidate tries too hard to appeal to the interests of party elites, they jeopardize their chances of winning the election. An example of this is the election of 1964 when Barry Goldwater went too far right and lost the presidential election. 2. After earning the party’s nomination, candidates embark on the general election campaign, or the phase of a political campaign aimed at winning election to office. Unlike the nomination campaign, where candidates must run against each other, during the general election campaign, candidates in partisan elections run against nominees from other political parties. All eligible voters, regardless of political party, have the opportunity to vote. For this reason, candidates are more likely to move their positions on political issues toward the ideological center. The length of the general election campaign varies from state to state. 3. Paid staff, political consultants, and volunteers work behind the scenes to support the candidate. Collectively, they plan...

Words: 2558 - Pages: 11

Premium Essay

How Campaign Finance Affects Electoral Outcomes

...How Campaign Finance Affects Electoral Outcomes (Name) (Subject) (Nature of Work) I. Introduction An electoral candidate can win an election if he has plenty of campaign finances. This seems to be the common wisdom that people believe in when it comes to the electoral success of candidates. However, such a statement is not easily verifiable. In fact, there are several factors involved in the determination of whether or not there is a correlation between the campaign finances used by candidates and the probability of winning due to these funds. It has been the contention of majority that for a candidate to get a seat or win the presidency, it is important that he spend lavishly. If this is the case, then incumbents, who are generally the ones equipped with the biggest campaign funds, have edge over challengers. It is also an assurance to potential challengers that if they manage to put up campaign funds, whether from contributors or from their own pockets, they are already assured of a win in the elections. With the government structure the United States have, generalizing for all sectors of the government, particularly during the electoral races, will be quite complex. Moreover, though it is very easy to make assumptions, such arguments could start crumbling once empirical studies of various experts on the subject of political science come to light. Factors such as policy decisions, party affiliations, popularity, etc. play a role in the...

Words: 2489 - Pages: 10

Free Essay

Politics

...of Congress who has been charged with ethics violations. State ethics investigators have charged Lt. Gov. Ken Ard with 69 counts of spending campaign money for his personal use and 23 counts of failing to disclose campaign expenses. Ard, who took office in November, has been under scrutiny since taking office for thousands of dollars of purchases, including meals and hotel rooms – particularly those made post-election – listed on his campaign finance reports. In a news release, the State Ethics Commission said it found probable cause for the charges and likely will send out a hearing notice. As lieutenant governor, Ard fills a part-time position with little real power, presiding over the state Senate and overseeing the state’s Office on Aging. The lieutenant governor also becomes governor should the governor die or resign from office. ethics investigators have charged Lt. Gov. Ken Ard with 69 counts of spending campaign money for his personal use and 23 counts of failing to disclose campaign expenses. Former South Carolina Lt. Gov. Ken Ard received 5 years probation, a 5,000 fine, and 300 hours in community services after pleading guilty to seven counts of violating the State Ethics Act. Ard pleaded to four counts of unlawful reimbursement of campaign contributions, two counts of falsely filing campaign reports, and one...

Words: 1108 - Pages: 5

Premium Essay

Campaign Financin

...CAMPAIGN FINANCING Using financial clout to influence the outcome of an election is an age-old practice in America's politics, and all 50 states have published code sections that money is spent during such. These code sections are placed to provide both accountability and transparency. Elections and campaigns continue to become more expensive and the involved candidates are forced to seek funding from the private sector to cover these costs. The use of money to influence an election's outcome is seen as an expression of free speech by many. However, others believe that money has a corruptive influence on the candidates, which results in a net negative outcome. Each state, therefore, has the designated duty to regulate campaign finance either by imposing disclosure, by setting limits of contribution or by providing a system where elections are publicly funded, all these to promote political equality. I believe that campaign finance reform has failed to prevent corruption and to promote even political equality, and thus I oppose it. An article written in 2003 in the journal of economic perspectives published the results of a study of about forty peer reviewed studies that had been published from the year 1972. The study showed that more contributions had no significant statistical effects with regards to legislation; the legislators were staunch to stand by their beliefs, those of their voters and even stood by their parties. A corrupt legislator will not be swayed by the prospect...

Words: 1126 - Pages: 5

Premium Essay

The Nonprofit Scandal of the Year: the Fiesta Bowl

...Care in managing the Nonprofit Organization (NPO). The Duty of Care requires directors of an NPO be reasonably informed about the organization’s activities, participate in making decisions, and do so in good faith with the care an ordinary prudent person would exercise in similar circumstances. This duty requires the individual BoD members pay attention to NPO activities and operations. Per a New York Times summary, top executives at the Fiesta Bowl funneled campaign contributions to local politicians, flew other Arizona elected officials to various points around the country at the bowl’s expense, racked up a $1,200 bill at a strip club and even spent $30,000 on a birthday party for the chief executive, according to an investigative report commissioned by the Bowl’s BoD. Lessons on internal controls from the scandal are important to sports programs’ cultures throughout the country. This scandal could determine how an NPO’s tax exempt status is overseen. The scandal also had implications for political contributions and NPO governance. FACTS OF THE SCANDAL Known in Arizona as the "Nonprofit Scandal of the Year," the Fiesta Bowl, the umbrella organization for four Section 501(c)(3) organizations the Arizona College Football Champion, the Arizona Sports Foundation, Fiesta Events, and the Valley of the Sun Bowl Foundation were rocked by avoidable controversy. The Fiesta Bowl staff learned of the problem following an Arizona Republic newspaper article December 18, 2009 written...

Words: 2847 - Pages: 12

Premium Essay

Obama's Campaign

...exception to the movement, going down in history as the social media election. The Obama campaign was a revolution dedicated to the utilization of social media to connect directly to the American public; their means of communication trigged a change that forever transformed the face of political campaigning. With the ability to communicate with supporters, they fully understood the potency of using social networking sites such as Twitter and Facebook. Through social media, they were able to mobilize and encourage supporters’ contribution in the campaign trial, with sites such as meetup.com. Social media also played a part in their fundraising, strategically using social networking sites, the main campaign website MyBarackObama.com, e-mails, text messages, etc. to receive donations. Last but not least, they were able to fully take advantage of the traffic flow to sites such as YouTube and Google to advertise their campaign. Facebook, known as one of the most dominate social networking sites of today’s society with nearly 600 million users. According to ‘Me Media’ by Cassidy(2006,pp.50–59) In 2006 “ Facebook was used at over 2,000 United States colleges and was the seventh most popular site on the World Wide Web with respect to total page views”. It was no coincidence that one Obama’s leading strategist was the Facebook cofounder Chris Hughes, whom at the time was 24 years old. The campaign spent approximately 467,000 dollars on Facebook advertisements targeted at the younger...

Words: 2102 - Pages: 9

Premium Essay

Campaign Finiance Restriction Is Right Fail

...IS CAMPAIGN FINIANCE RESTRICTION FAIL OF RIGHTS? INTRODUCTION Campaign finance reform has not managed either to promote political equality or prevent corruption. Even worse, in order to enhance the relative voice of others, the government decides to set donation limitation—restrict the speech of some elements. It is nothing else but to sacrifice people’s right to pursue an alleged political equality and preventing corruption, thus, it raises an ethical problem that restriction on campaign finance is fail of right. When looking into literatures of campaign finance reform, the debate of rights often based on the free speech protected by the First Amendment. People neglected that the free express of political petition is also a basic right acknowledged by the Universal Declaration of Human rights. Thus, I will examine this argument in the article from a broad to narrow scope. This article will analyze the campaign finance regulation’s failure from a right perspective. The article will demonstrate that some moral theorists divide rights into positive and negative categories which create distinctive correlative duties. This article will argue that the present restriction is actually infringe people’s rights and goes against with Universal Declaration of Human rights and the First Amendment. Moreover, the compel disclosure of donor’s information violates people’ s right to privacy, thus, such an act by government may be over regulated. Part 1 of this article will introduce...

Words: 4363 - Pages: 18

Premium Essay

Zara

...designed to be in class exercises that your students can work on in class. This is a master document that provides all worksheets questions and answers. You can modify or change it as needed in order to prepare one page two sided exercises for your students to hand out in class. You can also easily turn the answers into powerpoint slides to review the answers in class. Table of Contents Worksheet: Metric 1 Expense Types .................................................................................. 2 Worksheet: Metric 2 Percentage Change ......................................................................... 4 Worksheet: Metric 3 Market Share & Market Analytics ............................................. 5 Worksheet: Metric 4 Contribution Margin ...................................................................... 7 Worksheet: Metric 5 Mark-up & Margin........................................................................... 8 Worksheet: Metric 6 Pricing Wholesale to Retail ......................................................... 9 Worksheet: Metric 7 Break-Even ..................................................................................... 10 Worksheet: Metric 8 Return on Marketing Investment (ROMI) ........................... 11 1 of 11 MKT100 - Metrics Mastery Worksheets Worksheet: Metric 1 Expense Types 1) The Comfy Chair Company makes reclining chairs at its plant and sells them exclusively through its own retail store. It has the following expenses:...

Words: 2794 - Pages: 12

Premium Essay

The Csr of Body Shop

...owned by L’Oreal. They are known for selling natural beauty products inspired by nature. It has a range consisting of 1,200 products, including cosmetics and make-up. The Body Shop is a good example of a business that has a very strong sense of Corporate Social Responsibility. They promote their business and products through social and environmental campaigns, as well as strong believers in community trade, and against animal testing. Over the years, The Body Shop has become a powerful force for change, and it is now recognized as trailblazers in serving customers with high-quality ethical beauty products. By the end of 2013, it has 2,900 stores across 63 markets, and more people than ever before are joining The Body Shop community. The Social and Environmental Responsibilities The Body Shop is committed to activate self-esteem, which means running a business that makes people who encounter the company feel good about themselves. The Body Shop promotes diversity in its employment practices through global equal opportunities standards. It enables personal development for its employees through volunteering, training, and personal development plans. This is because with these activities, The Body Shop could successfully reduce employee turnover which represents a significant cost saving to the company business Therefore, the employee’s turnover has a made a significant difference, which resulted in a 17% decrease in UK and 18% reduction in US. In terms of the environmental responsiblitiy...

Words: 1196 - Pages: 5

Free Essay

Special Interest

...Running Header: Special Interest Special Interest Jermall Cuffee Professor: Dr. Jane El-Yacoubi POL 110 03/03/13 So, when the election is all over. What can the average American do to stay involved in the political arena and not have to wait for the next election? There is one significant way of influencing American government and that is through an Interest Group. Interest Groups also known as advocacy groups, lobbying groups or special interest, are in place to persuade or prevent changes in public policies. They exist for the solemn purpose of conveying the views and defending the interest of a part of society to public officials. There are all types of interest groups in America from animal rights groups to public interest groups to citizen groups. Interest groups get there start when James Madison developed the theme in “The Federalists (No. 10). In it he discussed factions, which was his term for interest groups and Madison believed that will always have diverse interest especially when it comes to economic circumstances and property ownership. Even though interest groups can be found deeply rooted in many different traditions and cultures such as Germany, they are common threads that can be observed in the development of interest groups mostly in Western industrial societies. There are about four phases in which the development of interest groups can be viewed. In what is called the first phase or the preindustrial phase beginning in the 1830s to the 1870s, there...

Words: 2073 - Pages: 9

Premium Essay

United Way

...United Way campaigns, about the “high living” of Aramony? Would these allegations affect your gift giving? Why or Why not? William Aramony, president of United Way who built United Way of America into one of the nation’s premier charities. The United Way has been an umbrella charity that was created as a fundraising organization to support many smaller charities. It has been supported by many business firms by fundraising drives and payroll deductions. He had headed the organization, and under his tenure, the organization grew rapidly, nearly quadrupling donations between 1970 and 1990. On the other hand, he was milking out the organization’s fund for his personal benefits such as significant limousine expenses, high salary and uncontrolled perks, international airfare for himself and guests, personal gifts and luxury items, travelling on the charity's dime for personal reasons, affair with young Florida women, loans and diversions of funds to companies that are owned by family members, a $4 million "golden parachute” etc. When an internal investigation and news reports disclosed his lavish life style, as a potential or actual giver to United Way campaigns, I felt terrible knowing all these fact where my contribution had been misused for his lavish lifestyle. I saw a clear sense of white-collar crime under the opportunity fraud triangle. Charitable organizations depend on contributions that people give freely out of a desire to help society, with no tangible personal benefits...

Words: 1172 - Pages: 5

Premium Essay

Voting Cue In American Politics

...3. Identify, define, and discuss the different voting cues that exist in American Politics. A voting cue is something that helps someone know how they should vote. However, there are two main voting cues which are “Some use incumbency, partisanship, or personal economic experience as a way to inform vote choice”, and “Others vote based on the candidate’s backgrounds or life experiences”. The first type bases on mostly emotional, if they feel the candidate will do good in the future, they will vote for them. In contrast, the second one based on the candidate’s backgrounds. This mostly do not involve emotional and they do not care if the candidate will do bad thing in the future. 4. What is the primary difference between a PAC and a Super...

Words: 261 - Pages: 2

Premium Essay

Ethics Mgmt

...GUIDELINES FOR CASE ANALYSIS The following guidelines are designed to assist in the case analysis process. The Guidelines are not intended to be a rigid format, however. Each question is intended to surface information that will be helpful in analyzing and resolving the case. Each case is different, and some parts of these guidelines may not apply in every case. Following each case are discussion questions that should be answered as part of any complete case analysis. The heart of any case analysis is the recommendations made based upon a solid logical foundation. The questions dealing with Problem and Issue Identification and Analysis and Evaluation should be used to define and then defend recommendations made in the final Recommendations step. Guidelines for Analyzing Cases Problem and Issue Identification 1. What are the central facts of the case? What assumptions are you making about these facts? 2. What is the major overriding issue in the case? What major question or issues does this case address that merits study at this point in the course? 3. What sub-issues or related issues are present in the case that merit consideration now? Analysis and Evaluation 1. Who are the stakeholders in the case and what are their stakes? What challenges, threats or opportunities are posed by these stakeholders? 2. What economic, legal, ethical, and philanthropic responsibilities does the company have, and what is the...

Words: 7801 - Pages: 32