By A conservative watchdog organization has asked the Internal Revenue Service to investigate whether a prominent Texas philanthropist improperly used a tax-exempt nonprofit to advance political causes, including a successful ballot initiative that reshaped Alaska’s election system.
The American Accountability Foundation (AAF) filed a complaint with the IRS on February 4, 2026, alleging that John Arnold’s Action Now Initiative, organized as a 501(c)(4) social welfare entity, engaged in substantial political spending while retaining tax-exempt status.
At issue is the group’s involvement in Alaska’s 2020 Ballot Measure 2, which established top-four primaries and ranked-choice voting, writes The Daily Caller. According to the complaint, public records show that Action Now Initiative devoted approximately $3 million in 2019 and 2020 to support the measure. However, IRS filings for the organization reportedly listed only $2,500 in total expenses for 2019 and $8,693 for 2020.
Ranked-choice voting has been a major boon for liberal and moderate candidates in conservative states, like Alaska. Senator Lisa Murkowski, a self described “moderate” who opposes the SAVE Act, for example, recently cut an ad in opposition to the repeal. RCV was first adopted in 2020, with the approval of Measure 2. In 2024, voters decided on an initiative to repeal RCV, which was defeated—49.9% ‘Yes’ to 50.1% ‘No.’ This was the narrowest ballot measure result in Alaska’s history.
AAF characterized the discrepancy as providing “substantial evidence of failure to report state political spending by [Arnold] to influence a successful ballot initiative in Alaska and him abusing the federal tax code to do it.” It further stated that the inconsistencies “strongly indicate violations” of tax law.
“While [Arnold’s] ideology is not itself unlawful, the use of a § 501(c)(4) entity to channel large-scale electoral spending—particularly when paired with materially incomplete federal reporting—constitutes an abuse of the social welfare form and warrants heightened enforcement scrutiny,” AAF argued in its filing.
The complaint urges the IRS to review Action Now Initiative’s financial disclosures and determine whether the organization is operating primarily as a political entity rather than as a social welfare group. The filing calls for any appropriate penalties, including the possible revocation of its tax-exempt status.
A spokesperson for Arnold Ventures, the private organization co-founded by Arnold and his wife Laura Arnold, rejected the allegations.
“Our organization fully complies with all applicable tax laws and reporting requirements, and any claim otherwise is false,” the spokesperson told the Daily Caller News Foundation.
Arnold, a billionaire who built his fortune in energy trading and hedge funds, co-chairs Arnold Ventures alongside his wife. The organization promotes evidence-based policy reforms across several issue areas, including criminal justice, gun control, and racial justice. Its website states that Action Now Initiative supports “the mission of Arnold Ventures to MAXIMIZE OPPORTUNITY AND MINIMIZE INJUSTICE through evidence-based policy reform.”
Arnold also sits on the board of Meta. According to campaign finance data compiled by OpenSecrets, 61% of Arnold Ventures’ contributions during the 2024 election cycle went to Democratic candidates and causes.
The IRS declined to comment in response to inquiries regarding the complaint.
The filing underscores the continued scrutiny surrounding so-called “dark money” groups organized under section 501(c)(4) of the tax code. While such organizations may engage in some political activity, federal law requires that promoting social welfare remain their primary purpose. Determining when that line has been crossed has long been a point of legal and political contention.
Whether the IRS takes action in this case remains to be seen. Over the past decade, several liberal billionaires, including foreigners, have dropped hundreds of millions of dollars in an effort to implement leftwing policies in the United States, even as their politicians have attacked “the oligarchy.”
[Read More: Hillary Admits Open Immigration Hurts America]
