NC NAACP loses tax-exempt status over failure to file certain tax forms

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Wednesday, August 31, 2022
NC NAACP loses tax-exempt status over failure to file certain tax forms
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The Internal Revenue Service has revoked the tax-exempt status of the North Carolina NAACP.

RALEIGH, N.C. (WTVD) -- The Internal Revenue Service has revoked the tax-exempt status of the North Carolina NAACP.

Our newsgathering partners at The News & Observer report the IRS revoked the organization's status earlier this year in May, but it was only revealed to the public this month.

According to the News & Observer, the NC NAACP's status was revoked because it failed to file tax forms showing the organization's tax exemption for three years in a row.

The decision by the IRS means money brought in is now eligible to be taxed.

Daquan Love, the Executive Director of the NC NAACP said the organization is working with the national office to ensure they can restore the IRS status.

Love said they're working directly with them and a team of accountants so they can restore the tax status of this chapter and "restore confidence in our donors."

"What this essentially means is that once this is restored, which we anticipate happening in a few weeks, that will be applied retroactively and there will be minimal impact to our donors and stakeholders," Love said.

The state chapter was put under administratorship in 2019, which means the national office has retained some control of the day-to-day operations.

"We continue to remain steadfast and working on civil rights issues like our Leandro litigation and with civic engagement and Black voter mobilization this November," Love said. "From Murphy to Manteo, the North Carolina state conference is laser-focused on civil rights issues that impact them."

Lars Dolder, politics reporter at the News and Observer, said they started digging into this after former NC NAACP President Anthony Spearman died in July.

Dolder said they found out things before his death were chaotic and that the NC NAACP was in "financial mayhem."

The administratorship stripped Spearman of most of his operational responsibility in 2019.

"It has eroded or might erode donor confidence in this organization," Dolder said. "They have obviously have relied heavily on support and contributions from people in the area who have wanted to support their mission. "It remains to be seen whether people lose some of their confidence in this organization to get things done but there are some questions as to how they use their money, whether they've mishandled it."

Love said the NC NAACP's work will not stop and the organization is "coming in to address the administrative issues, to reinstate our status, work through paperwork with IRS and we are going to continue the internal financial audits to ensure there is transparency."

Dolder said what they discovered was from correspondence from that time period when letters were flying back and forth from national leaders and those at the state organization where they were demanding that Spearman "turn over financial documentation that proved where the money had been for the past several years."

"And for a long time, part of the conflict that was Spearman refused," Dolder said. "He said it was unprecedented and beyond their authority to step in and so he refused to hand over those documents."

Pieces of the puzzle came together in the time frame where letters and emails were being exchanged. The News & Observer went through hundreds of documents; bank statements, letters and emails. It also went through screenshots of software used to organize the books.

"I'm interested in hearing from William Barber though, who is very active still, he's a prominent national figure," Dolder said of the former NC NAACP leader who left in 2017.

"We need some answers to what was going on behind the scenes, there's not clarity or a definitive story because Spearman and his camp and Barber have suggested some things," Dolder noted. "The state organization says others. The national organization has been conspicuously quiet."

The Raleigh/Apex NAACP had no comment on the matter.