A nonprofit watchdog, the Energy & Environment Legal Institute, has filed a document with the IRS alleging that the Sierra Club and the Sierra Club Foundation are violating nonprofit tax laws, a charge the environmental groups vehemently denied. The institute, known as E&E Legal, said Sierra Club organizations are in potential noncompliance with IRS rules because of its activities on behalf of industry firms, and is using its campaign against coal to conspire with the companies that profit from the so-called war on coal.

Conservative-leaning E&E Legal, which says its mission is to correct “onerous federal and state policies that hinder the economy, increase the cost of energy, eliminate jobs, and do little or nothing to improve the environment,” said eight of the Sierra Club Foundation’s 18 directors own or operate organizations that directly benefit from the club’s Beyond Coal campaign.

“The Sierra Club Foundation wages a war on coal to the direct financial benefit of its directors and top donors,” E&E Legal general counsel David Schnare said in a news release. In a separate report, E&E Legal also alleged that the Sierra Club generates some $1 million per year in taxable unrelated business income “on which there is no evidence that it intends to or is paying taxes.”

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