Topic: Professions & Institutions

The NAACP vs. the IRS

One would think that after being allowed to break the law with impunity for many years due to lax and cowardly enforcement, the news that it’s finally time to toe the line like everybody else would be greeted with a sigh, and maybe a “Well, it was nice while it lasted!” But the NAACP apparently doesn’t think that way. It prefers to make a completely disingenuous accusation of sinister “political motivations” now that the Internal Revenue Service has finally decided to wake up and do its job. That’s too bad, and it’s also pretty disgraceful, because the organization doesn’t have a leg to stand on. The pretense that the venerable civil rights organization has not repeatedly violated the extremely clear laws prohibiting non-profit tax-exempt organizations from engaging in partisan political activity goes far beyond posturing to outright lying.

In October, the IRS began investigating alleged tax code violations by about 60 non-profits whose activities during the election season may have crossed the line. By law, the agency cannot reveal which groups it is looking at, so the NAACP decided to announce its involvement, making it look as if it were the only target. This tactic was, in fact, part of the very partisan conduct it is being investigated for, and was immediately used by NAACP leaders Julian Bond and Kwami Mfume to justify exactly the kind of political attacks the law prohibits non-profits from making.

The immediate accusation from the group was that the timing of the investigation was “suspicious.” This was another dishonest statement, and one requiring more than a little brass. The IRS was investigating illegal election activity during an election; sounds reasonable, don’t you think? The suspicious timing was all on the part of the NAACP, which made the voluntary revelation that it was being investigated as close to the election as possible, presumably to maximize its value as a political issue to anger its membership against the President.

The NAACP is one of many (certainly more than 60) non-profit organizations that have habitually ignored the legal limitations on their political activity. 501C(3) organizations, or charitable non-profits, must confine their activities to educational and charitable activities. They cannot campaign for candidates or legislation, implicitly or directly. According to the tax laws, an organization is not regarded as operated exclusively for charitable purposes “if more than an insubstantial part of its activities is not in furtherance of an exempt purpose.” If a tax-exempt educational organization engages in education as only an incidental part of its overall mission, it is operating in violation of the law.

Pop quiz: can you identify the non-profit described below? Here’s what it tells the IRS that it does:

“Served as fiscal sponsor for 48 not-for-profit community efforts; providing accounting, human resource administration, gift-receipting, expense payments and other services. These community efforts include philanthropic collaborations between foundations, community efforts responding to crises and urgent calls to action, projects of limited duration, and new incubating organizations. Examples of achievements include assistance to homeless youth, making classical music reviews available free to the public, the strengthening of public schools, and assisting low income frail seniors and other disabled persons with transportation for medical needs.”  

Source: IRS Form 990, p.2. [Information courtesy of Public Interest Watch]

That organization, believe it or not, is, the vehemently anti-Bush group that has been sponsoring anti-Bush rallies and running attack ads during the campaign. The NAACP is hardly less disingenuous. In the last election, the organization sponsored an inflammatory TV ad implying that candidate Bush was complicit in the dragging death of James Byrd because he opposed hate-crime laws. Its status as an active ally of the Democratic Party and its candidates is not a matter of serious dispute. The NAACP has been, in reality, a scofflaw, convinced that political cowardice would forever keep the IRS from making it play by the rules.

And the NAACP is not alone, not by a long-shot There are many conservative organizations that play the same game, such as Gary Bauer’s group, American Values. All of them need to be sanctioned by the IRS. Perhaps when the darlings of the right lose their tax exempt status, it will stifle the angry claims of political persecution by the blatant violators on the left, like Greenpeace, Move-On, and the NAACP.

With its announcement of the IRS inquiry, the NAACP revealed that it is starting a PAC. That, of course, was what it should have done a long time ago. A separate political action group is the legal way to be a political player. But let’s make no mistake about the bad actors in the IRS crackdown: it is the non-profits like the NAACP who have been misusing tax-exempt funds, conduct that is illegal, unethical, and wrong. The only thing the IRS has done wrong is to let them get away with it for so long.

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