To put it nicely, there is no end in sight to the diminishing reputation of former cycling hero Lance Armstrong.  The worst can always get worse, and recent reports suggest just that.  A number of media outlets report that Armstrong’s cancer awareness non-profit, Livestrong, is allegedly under investigation by the IRS.  If you haven’t been following the story, here is what has happened to Armstrong recently, and why the rumors, if vindicated, are so brutal:

  • In Summer, 2012 the US Anti-Doping Agency released a massive report claiming Armstrong ran the most sophisticated doping program in sports history
  • With his image as the world’s best athlete all but wiped away, the subsequent consequences/punishments put the nail in the coffin:
    • Stripped of all seven Tour de France medals and $5 million in winnings
    • Received lifetime ban from International Cycling Competitions (governed by UCI)
    • Lost major endorsement deals with Nike, Trek and Anheuser Bush and an estimated $35 million in future earnings
    • Forced off position as Chairman of Livestrong and removed from its board

And now this:

Selena Roberts, made famous for uncovering Alex Rodriguez’s steroid use in her book A-Rod:The Many Lives of Alex Rodriguez, recently published an article on her own digital smartphone app and website Roopstigio, citing information that links the Livestrong foundation to illegal and immoral activity as a 501(c)(3) non-profit organization.  In the lengthy report Roberts says that the IRS is re-investigating Livestrong following renewed allegations that organization is leveraging its donors for political influence.  Neither the IRS nor Livestrong have confirmed the investigation, and Roberts’ sources are unnamed, but;

“In October, Betsy Andreu and Kathy LeMond described to Roopstigo a 2008 email Armstrong had sent to Sen. John Kerry that threatened to use the Livestrong database against the Democratic Party if then-presidential hopeful Barack Obama did not attend the cyclist’s cancer summit. Although there is no evidence that Armstrong acted on the ultimatum—Obama was in Germany and did not attend the event—it is against 501(c)(3) regulations for a tax exempt organization to wield political influence either for or against political candidates.”

The Internal Revenue Code clearly states that tax-exempt organizations such as Livestrong, “are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”  If Robert’s sources are correct, Livestrong could lose its non-profit status and face punishment in the form of excise taxes.

Lance’s issues with the IRS don’t end there — the USADA’s mandate that Armstrong return his $5 million in victory earnings is an entirely different can of worms.  Long story made short:  Lance will receive less tax benefit from his repayments, which are deductible as a business expense, than he would have if the allegations had come out sooner.  The story gets into nitty-gritty tax code stuff, but for a man whose personal finances have taken a whipping, it’s just more bad news.

As for Livestrong, Robert’s report cites other instances where the organization has come under scrutiny.  Note: Livestrong.org is the foundation’s official website, while Livestrong.com is an affiliated for profit company that received a license to use the Livestrong name.  For example, Michael Birdsong, a cancer-survivor and former big money donor and volunteer for Livestrong is trying to get some of his contributions refunded. He had this to say in an e-mail to Doug Ulman, President/CEO:

“You all know you have the money, influence, recognition and power to REALLY fund cancer research that NEEDS TO HAPPEN.  You could actually provide REAL resources at a scale to all the people who really need it… ’2.5 Million Cancer Patients Served’?  You guys confuse yourself with McDonalds.”

Charity Watch, the independent, non-profit charity rating organization run by the American Institute of Philanthropy, also issued criticism of Livestrong, including its inability to meet fundraising ceilings (which should be easy for a charity of its stature) and certain instances of neglecting to define which fundraising events went to Livestrong.com or Livestrong.org – a point Outdoor Magazine threw cold water on.   Still, the AIP does give Livestrong a solid A- rating.

As we wait for the alleged IRS investigation of Lance Armstrong’s former charity to unfold, it’s safe to say that the controversy of Lance is voluminous (yes, I did look-up synonyms to “no end in sight,” to find that word).

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