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CFA 2014 Tax Return

Compact For America(Action)

Compact for America(Action) filed a 990-N tax form with the Internal Revenue Service for tax year 2014. The form listed the address of the organization as 2710 Ivy Dell Ct., Houston, TX, 77059. This is the same address listed by Compact for American Educational Foundation and the Compact for a Balanced Budget Commission as their physical address. The one page form states assets for Compact for America(Action) are "normally $50,000 or less." Based on CFA documentation CFA(Action) had zero assets, income and revenue for tax year 2014. Statements by Compact for America indicated Compact for America(Action) is the only "political" arm of Compact for America. However all records indicate all operations of CFA are being conducted by Compact for America Educational Foundation, Inc.


Compact for America Educational Foundation, Inc., filed a 34 page tax return for tax year 2014. FOAVC is publishing both a copy of the tax form provided it by Compact for America and a copy obtained from CitizenAudit.org. Copies of tax pages shown below are taken from the CFA tax form and are highlighted as appropriate. The Foundation reported a total of 10 volunteers, gross receipts of $235,362 and assets of $141,865 for tax year 2014.

 In its Statement of Program Service Accomplishments (Page 2 of the tax form) the Foundation lists one item: to give "educational presentations" at two "public policy and philosophical conferences in Las Vegas, NV and Washington DC." The tax form requires Compact for America "describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses." Compact for America lists no other service accomplishments that tax year other than stating, "The Foundation's educational team researched and wrote nonpartisan policy papers...to advance the Foundation's mission." FOAVC's research indicates the "nonpartisan policy papers" used "to advance the Foundation's mission" may not have complied with IRS non partisanship regulations. The papers appear to fail the required equally presenting both sides of an issue standard mandated by Internal Revenue Service regulations.

The 2014 CFA tax form contains a required Statement of Functional Expenses (Page 10 of the tax form). This form itemizes the expenses for the program services accomplishments described on Page 2 of the tax form. As only one accomplishment is listed by CFA presumably all expenses for CFA refer to that one accomplishment described on Page 2 of the tax form which was to attend two "public policy and philosophical" conferences in Las Vegas and Washington DC as no other accomplishment is described. The itemized statement lists the entire $44,900 in management expense under the "program service accomplishments" which was singularly described as attending two conferences in Las Vegas and Washington DC. Therefore the itemized statement reveals Compact for America paid two CFA managers $44,900 for the sole purpose of attending two "public policy and philosophical" in Las Vegas and Washington DC. If this were otherwise, the itemized statement would show partial amounts of the $44,900 in other columns, such as "management and general expenses." No such figures are shown. While the tax records shows the two managers, Nick Dranias and Chip DeMoss were paid nothing directly by CFA, tax records also show companies exclusively controlled by these two individuals were paid a total of $44,900 in management compensation fees.
 
The cost for writing "nonpartisan" policy papers appears to be listed under "educational communication" and is shown as $750. As this amount is listed separately from the $44,900 listed for management expenses, it must presumed this expense relates to a payment made to an unnamed individual who wrote the "nonpartisan" papers. If the managers had written the papers themselves or the money referred to a time estimate the $750 would have been listed in the "management and general expenses column" of the form rather than the "program service expenses" column. Presumably, the $9,068 printing expenses refers to printing costs for printing the "nonpartisan" papers presented at the two "public policy and philosophical" conferences in Las Vegas and Washington DC.

The itemized statement shows a total of $89,319 was spent to accomplish the program service accomplishment described on Page 2 of the CFA tax form as attending two "public policy and philosophical" conferences in Las Vegas and Washington DC. The expense is itemized as $44,900 for management expenses, $24,568 in travel expenses, $10,033 in conference, conventions and meetings costs, $9,068 in printing costs, and $750 for "educational communication" to attend the conferences.
 
According to the tax form the cost for presenting CFA material (booth space rental) at the two conferences was $10,033 or approximately $5,000 per conference, presumably to reserve presentation or booth space at the two conferences. Travel expenses are listed as $24,568 or $12,284 for each individual to attend the two conferences.

According to Internet sources:
Average cost of a hotel room per night in Las Vegas in 2014 was $116.00 or $232 for two people;
Average cost of a hotel room per night in Washington DC was $243 or $486 for two people;
Cost of a nonstop flight from Houston TX (headquarters of CFA) to Las Vegas (round trip)  $622 or $1244 for two people;
Cost of a nonstop flight from Houston TX (headquarters of CFA) to Washington DC (round trip) $367 or $734 for two people;
Average cost of a restaurant (in the casinos) in Las Vegas $50.00 a person or $150 a day per person or $300 for two people;
Average cost of restaurant in Washington DC is $70.00 a person or $210 a day per person or $420 for two people.

Summation:
Cost of two round trip tickets to Las Vegas, $1244, Daily costs for two: hotel rooms $232; meals $300. Total daily expenses = $532.
Summation:
Cost of two round trip tickets to Washington DC, $734, Daily costs for two: hotel rooms $486; meals $420. Total daily expenses = $906.
 
Based on the information in the 2014 tax report, approximately $1,978 dollars was spent in airline travel by Compact for America to fly its two managers to Las Vegas and Washington DC. Subtracting the $1,978 from the total reported expenses of $24,568 for the two conferences leaves $22,590 or $11,295 in expenses for each the two CFA representatives while attending the conferences. Assuming half of the $11,295 was spent on each trip ($5647) and based on the daily total expenses divided into the $5647 to obtain the days spent in each city, CFA reported to the IRS that its two managers were paid $44,900 to spend 10 days in Las Vegas at a "public policy and philosophical conference" and six days in Washington DC at a similar conference.

Page 2 of Schedule C of the tax form states $93,497 was spent for "exempt purpose expenditures." The form further states that zero money was spent on lobbying expenditures to influence public opinion (grass roots lobbying) and zero amount was spent to "influence a legislative body (direct lobbying). On Part IV, Schedule C (Page 3) Compact for America affirms this statement saying, "No political campaign activities took place during the year." According to public record the states of Alaska and Georgia enacted laws to become the first two states to join the Compact for Balanced Budget in 2014. Alaska joined the compact on July 21, 2014; Georgia on April 12, 2014. Compact for America is on record as having written the compact which was enacted by these two states.