The IRS removed the North Carolina NAACP’s tax-exempt status on May 15. This is after the organization failed to file tax returns for three consecutive years. The IRS reported that many local NAACP branches across North Carolina also had their tax-exempt status revoked for the same reason.
Organizations that fail to report taxes for three consecutive years are automatically placed on the IRS’s Auto-Revocation List.
The News & Observer broke the story this week. They revealed that the North Carolina chapter has faced several conflicts within the last several years, including disciplinary action from the national organization.
A Raleigh tax attorney, and former IRS associate chief counsel, Jack Cummings, says that NC NAACP’s income will be taxed moving forward and that failing to file additional returns could result in fines.
It’s been reported that revocation could hinder the NC NAACP’s ability to fundraise.
The national organization placed the North Carolina chapter under an “administratorship” in 2019. This is because of financial mismanagement allegations. The administratorship removed power from local leaders and handed it over to the national organization.
Former NC NAACP president Rev. Anthony Spearman has been accused of failing to provide necessary records and financial documents to his successor. The national organization removed Spearman from his position and ordered him to provide the new president with the documents.
Before his death, Spearman wrote to the national organization’s CEO, Derrick Johnson. He accused the national NAACP of unjustifiably removing decision-making power from North Carolina local leaders.
Spearman stated that the administratorship placed doubt in the minds of key financial supporters. This caused a dip in donations to the organization.
Gerald Givens Jr., the NC NAACP’s treasurer, in a February meeting revealed troublesome financial findings to national leaders. The N&O reported that Givens shared a “strictly confidential” presentation that exposed eight years of “very problematic” payment patterns at the NC NAACP.
Givens stated that there was evidence of “misappropriation of funds on multiple levels” totaling more than $1 million.
The national organization appointed a new executive director to the North Carolina chapter, Da’Quan Love. In a WRAL interview, Love stated that he had been hired to audit the NC NAACP’s finances.
Love said, “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.”