IRS revokes North Carolina NAACP tax-exempt status



The IRS removed the North Carolina NAACP’s tax-exempt status on May 15 after the organization failed to file tax returns for three consecutive years. The IRS also reported that many local NAACP branches across the state had their tax-exempt status revoked for the same reason.

Any 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, revealing 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, told the N&O that NC NAACP’s income will be taxed moving forward and that failing to file additional returns could result in fines.

The news outlet reported that experts said the revocation could hinder the NC NAACP’s ability to fundraise.

In 2019, the national organization placed the North Carolina chapter under an “administratorship” 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 was accused of failing to provide necessary records and financial documents to his successor. Because of this, 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, in December 2020. 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, causing a dip in donations to the organization.

In a February meeting, Gerald Givens Jr., the NC NAACP’s treasurer, 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 possible 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.”

After taking heat from conservatives, IRS changes course to grant Christian group tax-exempt status



Following legal pressure and significant backlash on social media, the Internal Revenue Service on Wednesday reversed course to grant a Christian nonprofit organization tax-exempt status.

The IRS had previously rejected the status to the group, known as Christians Engaged, arguing its mission of educating and empowering Christians to engage in America's civics process was partisan by default since Christians usually align with Republican candidates.

In a rejection letter issued in May, the IRS informed Christians Engaged that it was disqualified from holding the status because the "Bible's teachings are typically affiliated with the Republican Party and candidates."

News of the group's rejection immediately sparked outrage among conservatives and was picked up by many right-leaning media outlets.

But the nonprofit didn't take the news lying down. It responded with a legal challenge to the rejection, enlisting help from religious liberty law firm First Liberty Institute, which filed an appeal last month.

On Wednesday, First Liberty Institute announced in a press release that the IRS had changed its mind following a review of the matter.

The law firm noted, "The reversal [came] after a national backlash against the IRS's initial rejection of Christians Engaged's nonprofit status."

"This is truly great news for our client, as well as religious organizations and churches across America," said Lea Patterson, counsel for First Liberty Institute, in a statement. "We are grateful the IRS changed course to bring its decision into line with the Constitution and its own regulations."

Christians Engaged President Bunni Pounds added, "I am incredibly thankful to the IRS for doing the right thing, and we look forward to continuing our mission of educating more followers of Jesus to pray for our nation and to be civically engaged. When we stand up, our republic works for all Americans."

On its website, Christians Engaged states that it "exists to awaken, motivate, educate, and empower ordinary believers in Jesus Christ to: pray for our nation and elected officials regularly, vote in every election to impact our culture, [and] engage our hearts in some form of political education or activism for the furtherance of our nation."

But the IRS originally disagreed, accusing the group of engaging in "prohibited political campaign intervention."

"Specifically, you educate Christians on what the Bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations," IRS exempt organizations director Stephen Martin charged in the initial rejection letter.

Under federal law, a religious organization can obtain tax-exempt status so long as it operates exclusively for charitable or educational purposes and does "not attempt to influence legislation" or "participate in any campaign activity for or against political candidates."

GOP lawmakers demand IRS reverse rejection of Christian group's tax-exempt status over 'Bible teachings,' fire those responsible



A bicameral group of Republican lawmakers issued a demand Friday to the Internal Revenue Service that the agency reverse its now-infamous decision to reject a Christian nonprofit's tax-exempt status over its Bible teachings.

What's the background?

In May, the IRS sent a rejection letter to Christian Engaged denying its nonprofit status because the "Bible's teachings are typically affiliated with the Republican Party and candidates."

Christians Engaged's website says the group "exists to awaken, motivate, educate, and empower ordinary believers in Jesus Christ to: pray for our nation and elected officials regularly, vote in every election to impact our culture, [and] engage our hearts in some form of political education or activism for the furtherance of our nation."

This was too much for the IRS, which said in the letter written by the agency's exempt organizations director, Stephen Martin:

Specifically, you educate Christians on what the Bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations. The Bible teachings are typically affiliated with the Republican Party and candidates. This disqualifies you from exemption under IRC Section 501(c)(3).

Martin's letter made it clear that the mere notion that Christians Engaged promotes biblical teachings means it engages in "prohibited political campaign intervention."

"You operate for a substantial non-exempt private purpose and for the private interests of the Republican Party," Martin wrote.

Christians Engaged filed an appeal on June 16.

What are the lawmakers saying?

In a letter to IRS Commissioner Charles Rettig, a group of 15 Republican senators and representatives led by Texas GOP Rep. Chip Roy demanded that the agency review the decision and remove anyone who had a hand in "the blatantly biased, discriminatory, and flawed reasoning that led to the determination."

Citing Martin's letter that said biblical understanding of life, marriage, and justice were connected to the GOP, the letter writers reminded the IRS that those "issues have always been at the core of Christian belief and classing them as inherently political is patently absurd."

"If the IRS applied this interpretation broadly, it would jeopardize the tax-exempt status of thousands of Christian churches across the country," the lawmakers said.

They also noted Martin's apparent "offense" at the group's teachings about "freedom of speech, defense, and borders and immigration, U.S. and Israel relations," but as they pointed out, religious beliefs inform how millions of Americans vote and often prompt "get out the vote" campaigns.

"In fact," the lawmakers wrote, "President Biden himself campaigned alongside church leaders during the 2020 presidential race."

"The IRS must objectively analyze applications for tax-exempt status and cannot allow political biases to creep into its decisions," they concluded. "We urge you to immediately review Christian Engaged's application for 501 (c)(3) status personally, and terminate the IRS staff involved in the flawed and politically motivated reasoning behind the decision."

Along with Roy, the letter was signed by Sens. Mike Lee (Utah), Ted Cruz (Texas), and Marco Rubio (Fla.), and Reps. Jeff Duncan (S.C.), Doug Lamborn (Colo.), Louie Gohmert (Texas), Dan Bishop (N.C.), Burgess Owens (Utah), Yvette Herrell (N.M.), Daniel Webster (Fla.), Ted Budd (N.C.), Andy Biggs (Ariz.), Bob Good (Va.), and Lauren Boebert (Colo.).

(H/T: The Christian Post)

IRS rejects Christian nonprofit's tax-exempt request because 'Bible teachings are typically affiliated with the Republican Party'



The Internal Revenue Service last month denied a Christian nonprofit organization tax-exempt status by arguing its mission of educating and empowering Christians to engage in America's civic process necessarily benefits the Republican Party.

What are the details?

In a May rejection letter sent to Christians Engaged, the IRS wrote that the group is disqualified from the status because the "Bible's teachings are typically affiliated with the Republican Party and candidates."

"Specifically, you educate Christians on what the Bible says in areas where they can be instrumental including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations," IRS exempt organizations director Stephen Martin wrote in the letter. "The Bible teachings are typically affiliated with the Republican Party and candidates. This disqualifies you from exemption under IRC Section 501(c)(3)."

Christians Engaged says on its website that it "exists to awaken, motivate, educate, and empower ordinary believers in Jesus Christ to: pray for our nation and elected officials regularly, vote in every election to impact our culture, [and] engage our hearts in some form of political education or activism for the furtherance of our nation."

In its letter, the IRS does not appear to dispute the group's claims or argue that it does not carry out its mission honestly. However, according to the Treasury agency, the very fact that the group promotes biblical teachings makes it de facto engage in "prohibited political campaign intervention."

"You operate for a substantial non-exempt private purpose and for the private interests of the Republican Party," Martin concluded.

Under federal law, to receive tax-exempt status as a religious organization, an organization must operate exclusively for charitable or educational purposes and must "not attempt to influence legislation" or "participate in any campaign activity for or against political candidates."

What else?

In response to the decision, the group's legal counsel, First Liberty Institute, filed an appeal last week.

In a press release about the appeal, Counsel Lea Patterson said the claims "that Biblical values are exclusively Republican ... might be news to President Biden, who is often described as basing his political ideology on his religious beliefs."

Patterson added: "Only a politicized IRS could see Americans who pray for their nation, vote in every election, and work to engage others in the political process as a threat. The IRS violated its own regulations in denying tax exempt status because Christians Engaged teaches biblical values."

In its appeal letter, First Liberty argued, "By finding that Christians Engaged does not meet the operational test, Director Martin errs in three ways: 1) he invents a nonexistent requirement that exempt organizations be neutral on public policy issues; 2) he incorrectly concludes that Christians Engaged primarily serves private, nonexempt purposes rather than public, exempt purposes because he thinks its beliefs overlap with the Republican Party's policy positions; and 3) he violates the First Amendment's Free Speech, and Free Exercise, and Establishment clauses by engaging in both viewpoint discrimination and religious discrimination."

Anything else?

According to the press release, Christians Engaged president Bunni Pounds lamented, "We just want to encourage more people to vote and participate in the political process. How can anyone be against that?"

The group was formed in July 2019 as a Texas nonprofit organization and describes itself on its website as educational, Christian, and nonpartisan.

As a major part of its efforts, Christians Engaged helps organize statewide and local prayer gatherings in which participants make supplications and petitions to God on behalf of elected leaders.