Temple Agrees to Pay Tax for Its Political Donations

A Buddhist temple involved in a controversial political fund-raiser four years ago featuring Vice President Al Gore has agreed to pay federal tax penalties as a result of an investigation by the Internal Revenue Service.

The Hsi Lai Temple of Hacienda Heights confirmed the IRS examination Tuesday and said that the temple has agreed to pay an undisclosed “excise tax” on all political expenditures. It did not say when the IRS investigation began.

At the same time, the temple said it has agreed to restore any political expenditures to its own accounts and promised not to engage in political fund-raisers in the future.

“It has taken certain actions to make it clear to all its employees and agents that these acts are inappropriate and will not occur in the future,” the International Buddhist Progress Society said in a prepared statement issued for its temple.

While Gore was not involved in any illegalities, he was present at the April 1996 fund-raiser, a fact that has become an issue in the presidential election campaign. Two months ago, Texas Gov. George W. Bush poked fun at Gore on the fourth anniversary of the fund-raiser.

The temple luncheon and a follow-up solicitation netted more than $100,000 for the Clinton-Gore campaign. Virtually all of it was returned by the Democratic National Committee when questions were raised about its legality.

The IRS’ Los Angeles office said Tuesday it could not confirm or deny the investigation. But temple spokeswoman Manyee Shih confirmed that the temple had issued the statement. She referred all other questions to the temple’s Washington attorney, Barry Simon. Simon’s office said he was on vacation in Spain and could not be reached for comment.

IRS spokesman Keith Kimball would not comment on the specific case, but he said that generally a 10% excise tax is levied by the IRS when a nonprofit organization is found to have made improper political contributions. In addition, the manager of the nonprofit who had knowledge of the improper fund-raising would have to pay an additional 2 1/2% excise tax.

If a nonprofit failed to make these payments within a specific taxable period and/or failed to restore the funds, a 100% excise tax would be imposed, Kimball said.