IRS revokes tax-exempt status of North Carolina NAACP

Aug 31, 2022, 9:09 AM | Updated: 12:09 pm

RALEIGH, N.C. (AP) — North Carolina’s influential state chapter of the NAACP has lost its federal tax-exempt status for failing to file tax returns for three years, according to the federal government.

The Internal Revenue Service stripped the civil rights organization’s state chapter of its tax-exempt status May 15 under a process that automatically revokes the designation for nonprofits that fail to file federal tax returns for three consecutive years, according to a post on the IRS site. The status change was made public this month.

The state chapter has been a prominent voice in decrying the policies of the state’s Republican-controlled legislature, including challenging voter access laws in recent years. Earlier this month, the civil rights group scored a victory when the state Supreme Court ruled a lower court must consider nullifying a voter ID mandate approved by citizens in 2018.

The loss of federal tax-exempt status was first reported by The News & Observer in Raleigh. The newspaper reports that experts on charitable giving say losing the status could hinder fundraising efforts and potentially drain the organization’s resources through taxes on donations and fines.

The newspaper also reported that the national NAACP intervened in 2019 to place the state chapter under a punitive administratorship, giving the national organization more input in how the state branch is staffed and operated. The state and national organizations are working to restore the branch’s tax-exempt status.

Da’Quan Love was recently appointed by the national organization to serve as executive director of the North Carolina NAACP. He told WRAL-TV he views his role as a consultant to help the state chapter shore up its finances as the national organization performs a multi-year audit of its finances. He previously served as a leader of the Virginia branch of the NAACP.

“The national NAACP has launched a financial audit, a full financial, multi-year audit of the state conference as well as all the branches in the state of North Carolina to rectify these issues and get to the bottom of these challenges and ensure that this does not happen again and we’re in good financial standing,” Love told WRAL.

He said the national organization will provide the state chapter with resources and support so it can continue its civil rights work including get-out-the-vote efforts ahead of the November election.

The loss of tax-exempt status became public weeks after former state chapter president The Rev. T. Anthony Spearman was found dead in his home. A cause of death has not been released. Spearman, who lost a bid in 2021 for reelection to lead the state chapter, had filed a lawsuit against state and national NAACP officials accusing them of defaming him and conspiring to remove him from the presidency.

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IRS revokes tax-exempt status of North Carolina NAACP