Southwest Voter Registration Fends Off History Of Tax Problems

By Carlos Sanchez, Voxxi

Southwest Voter Registration Education Project, one of the nation’s most visible and respected Hispanic voter registration groups, has a 25-year history of local, state and federal authorities placing liens on its property for failure to pay taxes, a VOXXI investigation shows.

Since 1987, governmental entities such as the IRS, the State of Texas and local authorities, have placed liens on the organization’s property at least 56 times. Altogether, these agencies have sought to collect more than $800,000 in unpaid taxes, according to Texas land records.

“SVREP has been voluntarily paying down its tax obligation since last year,” Southwest Voter President Antonio Gonzalez said in a written statement. “Like tens of millions of Americans, we have been deeply impacted by the great recession. We expect resolution of this obligation over the next period.”

He continued: “SVREP continues to pursue its mission of voter empowerment with current projects in San Antonio, Dallas, Las Cruces, and southern California that have recently registered over 10,000 voters.  This year, SVREP will contact some 5 million Latino and other minority voters this election cycle through our voter registration and education activities.”

It is unclear how much tax remains unpaid because there are at least eight “release of lien” notices filed in the Bexar County Clerk’s office in San Antonio, where Southwest Voter has one of two offices (the other is in California). These release of liens total $185,799.

One San Antonio lawyer, who won a collections judgment against Southwest Voter in 2005, cautioned that sometimes release of liens are never filed in the courthouse. His records indicate that Southwest Voter fulfilled its financial obligation to his client, but that is not reflected in land records.

The tax issues came to light recently when a number of people and organizations who have financial interactions with Southwest Voter – including some financial contributors — received letters from the IRS informing them that Southwest Voter owed the IRS uncollected taxes. The letter directed these entities to submit any money they owe Southwest Voter to the IRS.

The undated letter, received this month, said Southwest Voter owes $389,509.05 in federal taxes, but offers no hint about the scope of collection activity that has taken place over the past quarter century. The letter details 10 tax assessments that the IRS said remain unpaid, going back to 1996.

Bexar County records show that the IRS filed nine liens last year on Southwest Voter’s property, saying it owed a total of $175,618.51. The IRS letter, however, shows only one assessment in 2011 that the IRS is trying to collect, totaling $2,145.40.

Southwest Voter’s property is valued at $36,500, county records show.

Revelation of the tax problems for one of the premier Hispanic voter registration groups comes during a critical election year in which Hispanic voters are predicted to play significant roles in key battleground states.

With an estimated 50,000 Hispanics becoming eligible to vote each month, voter registration is a vital, albeit unsung and arduous component of many candidates’ electoral strategy.

In one filing to the IRS in 2010, Southwest Voter said it had registered 15,000 voters in Texas and had contacted 500,000 voters in California with an unspecified voter education message.

Still, some elected officials worry that financial issues may distract the organization and have an effect on its ability to register new voters.

“Everyone is being comforted that something is being done about voter registration when, in fact, this suggests that nothing is happening,” said one official who is seeking elective office this year. The official spoke on condition of anonymity, acknowledging the prestige of Southwest Voter, and adding that he does not want to be viewed as having a public fight with that organization.

Mark McKinnon, a Texas-based media consultant who had advised Republicans, including former President George W. Bush, as well as Democrats, including former Texas Gov. Ann Richards, echoed the sentiment that such financial issues can be a distraction.

“At a time when there is such a focus on Hispanic voter impact and registration, it’s unfortunate that SVREP is distracted by other issues,” he said.

Southwest Voter and its ancillary research arm, the William C. Velasquez Institute, which has also been targeted by collection efforts, are both classified as non-profit organizations by the IRS. That status frees the organizations from most tax obligations. But these non-profits are required to pay payroll taxes on its employees.

An IRS spokesman declined to comment on Southwest Voter. But several liens placed by the Texas Workforce Commission, which collects payroll taxes at the state level, make clear that it has sought payroll taxes from Southwest Voter at least a dozen times.

Non-profits are also required to file annual financial reports with the IRS called form 990s, although the IRS allows these groups to lag at least a year in its filings.

The latest 990 form filed by Southwest Voter is for the 2010 calendar year. In it, it listed an annual payroll of more than $444,000, but it does not indicate how many are employed there.

There also is no indication of any specific tax obligations in Southwest Voter’s latest filing. But it does indicate that the organization was in the hole more than $450,000 in 2010.

Based on the pattern of liens placed on Southwest Voter’s Texas property, enforcement by taxing entities is either stepping up or more taxing liabilities are being unmet.

In 1987 and 1988, for example, court records indicate a single lien was placed each year on the organization’s property. That was followed by six years without a lien. After that, up to three liens were filed in 12 of the next 14 years.

In 2009, taxing entities placed four liens on Southwest Voter’s property. That doubled to eight in 2010. 

Carlos Sanchez is Voxxi National Political editor.