IRS Revokes North Carolina NAACP’s Tax Exempt Status

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

The Internal Revenue Service stripped the civil rights organization’s state chapter of its tax-exempt status on May 15 in a process that automatically revokes the designation of nonprofits that don’t produce no federal tax returns for three consecutive years, according to an article on the IRS website. The status change was made public this month.

The state chapter has been a prominent voice in speaking out against 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 that a lower court should consider overturning a citizen-approved voter ID warrant in 2018.

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

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

Da’Quan Love was recently named by the national organization as executive director of the North Carolina NAACP. He told WRAL-TV that he considers his role as a consultant to help the state chapter consolidate its finances as the national organization conducts a multi-year audit of its finances. He previously served as leader of the Virginia branch of the NAACP.

“The National NAACP has initiated a financial audit, a comprehensive, multi-year financial audit of the state conference as well as all branches of the state of North Carolina to rectify these issues and get to the bottom of these challenges and ensure this doesn’t happen again and we are in good financial shape,” 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 efforts to secure the vote before the November election.

The loss of tax-exempt status became public knowledge weeks after former state chapter chairman Reverend T. Anthony Spearman was found dead at his home. A cause of death has not been released. Spearman, who lost a 2021 bid to run for re-election as head of the state chapter, had filed a lawsuit against state and state NAACP officials accusing them of defaming him and conspiring to remove him from the presidency.

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