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AILA's Tax Returns: A Course in Creative Writing

by Kenneth Rinzler

I learned only recently that AILA had filed an amended tax return (Form 990) for 2010 back on November 30, 2011, a few weeks after I started a discussion with the membership about the inaccuracies in AILA's tax returns for the past many years and the insider deals which had finally come to light. (AILA was hoping no one would ask to see the amended return, and of course they never sent me a copy until I made multiple follow-up requests these past two weeks; one would have hoped that after last year's controversy they would have had the common sense to post it - and all future tax returns -- on their website, both to inform the membership and to ensure accuracy of the posted returns rather than relying on a third party, but read on and you'll see why they didn't.)

I have now reviewed the amended 2010 return and would like to bring some disturbing issues to your attention. (In this regard please note that AILA did not file any amended returns for the years prior to 2010, even though the errors on the 2010 return were also made in numerous preceding years; this means that many of the allegations I raised last year still stand.)

    1. Insider Transactions. Last year I pointed out the questionable insider loans made in 1999. The amended return now shows another insider deal, one which AILA conveniently "forgot" to disclose in its original 2010 Form 990: a $100,000 payment for a book to Daryl Buffenstein, a past president and current member of the Board of Governors of the organization. [Exhibit A - page 35 of the attached amended return] AILA does not usually pay for written materials it promotes (for example, the Visa Processing Guide, to which I contributed for about ten successive years at a cost of a couple of thousand dollars per year for my visits to Germany, but for which all I received was a copy of the book itself, so kudos to Daryl for selling himself betterlol). Mr. Buffenstein's book is constantly promoted by AILA, and one wonders if the general membership would be happy if they knew of this payment and the details surrounding the book and its revenues. It's unlikely this payment would have come to light if I didn't question earlier insider transactions.

    (As an aside, two points: first, AILA has adopted insider transaction policies that would seem to rival the amoral standards of Wall Street, and two, maybe now the leadership will stop with all the talk about all the "sacrifices" they make in their devotion to AILA. Hell, give me $100,000 to write a book and I'll name my first born after you.)

    2. After stating to the IRS year after year after year in its Form 990 that it "has no local chapters, branches, or affiliates", in the amended return AILA finally acknowledges that it does have chapters. [Exhibit B - page 6 of the return] It is impossible to think of this as anything other than intentional misrepresentation or gross negligence, either of which is inexcusable for an organization of lawyers. Yet, by the way, AILA has chosen to let its earlier returns stand unamended, thus for all the years before 2010 AILA apparently still stands by its false assertion that it had no chapters. In addition, as the IRS can see from its own records, virtually none of these local chapters file the apparently required tax returns.
    3. AILA has consistently failed to follow the requirements of Part VII of Form 990, dealing with compensation of key employees. On the amended return AILA has now included another required person (Theresa Waters, the Senior Director of Human Resources at $148,468 annually), something which they conveniently "forgot" to do on prior returns. [Exhibit C page 11]
    4. AILA likes to pretend that the American Immigration Council (AIC), an advocacy group, is a separate entity, yet reality proves otherwise. AIC is funded through the dues of AILA and its chapters, AIC shares AILA's headquarters building and now, for the first time in its amended return, AILA acknowledges that AIC personnel work on AILA matters. [Exhibit D - page 17]
    5. In Schedule D of its amended return, AILA again states that "it has appropriate support for any uncertain income tax positions taken; therefore, management has not identified any uncertain income tax positions." If this were the case, it wouldn't have needed to file an amended return only after pressure was put on it by the membership. [Exhibit E - page 26]

As I have said many times and which I repeat here, AILA has become primarily an advocacy organization, has played "fast and loose" with our tax laws and, maybe most disturbing of all, has consistently exhibited behavior that borders on the amoral standards of Wall Street when it comes to insider deals.

And since AILA is obviously incapable of healing itself, here is some helpful information for those members who wish to take action without worrying about retribution from the AILA powers that be.

For those who feel AILA has been in noncompliance with the tax laws, for example due to its admitted inaccuracies on its tax returns over the years, its use of members' dues to improperly fund advocacy and/or lobbying efforts, and questions about insider transactions, please contact the IRS and let them know that an investigation of AILA's continued tax-exempt status is warranted. The address is:

IRS - EO Classification
1100 Commerce Street
Mail Code 4910 DAL
Dallas, TX 75242

FYI, "EO" stands for "exempt organizations". The IRS maintains an ongoing examination program to ensure exempt organizations continue to meet the requirements for tax-exempt status. Whenever they receive information about an organization that raises questions about its continued exempt status or compliance with the tax laws, they forward the information to their Dallas office to determine if it warrants an examination or other action.

All information is kept strictly confidential, and is NOT subject to disclosure under FOI Act requests.

For additional information, please see:

Note: AILA's Federal EIN is 23-7085097. The street address is 1331 G Street, NW, Washington, DC 20005

One wonders what other insider transactions and unofficial agreements have occurred over the years without the faintest knowledge by anyone in the general membership, or if there was ever a proposed insider deal which failed to obtain leadership approval. And, of course, AILA is sure to scream that they followed all proper procedures - just like Wall Street with those bank bonuses - so no one should complain. To paraphrase those old highway construction signs, this is "your dues money at work". Enjoy.

See AILA's Amended Form 990 for 2010 here.

About The Author

Kenneth Rinzler is an immigration lawyer in Washington, DC, and a frequent visitor to consular posts, having now traveled to 40 countries. A graduate of Georgetown University and Seton Hall University School of Law, he is a member of the District of Columbia, Indiana, New Jersey, and U.S. Supreme Court Bars. In addition to authoring articles for the American Immigration Lawyers Association (AILA), he has written on immigration law for the German American Chamber of Commerce. Before specializing in immigration law, he spent nearly ten years working as a legislative assistant and counsel to a U.S. Congressman, and thus has an intimate knowledge of Federal legislative and administrative procedures

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.