Thursday, September 9, 2010
The New York Post reports that Revered Al Sharpton's civil-rights group, National Action Network (NAN), a nonprofit organization exempt from federal income tax under Section 501(c)(4), is in financial peril that threatens its future. According to an audit performed by accounting firm KBL on the organization's 2008 financial records, NAN suffers from "recurring decreases in net assets - and has been dependent upon advances from related parties and the nonpayment of payroll tax obligations - to maintain continuity." KBL further warned NAN's board that because of "inadequacies" in the organization's accounting records, it could not offer an opinon as to the accuracy of such records, ultimately concluding that "[t]hese circumstances create substantial doubt about the organization's ability to continue."
In addition to federal tax problems encountered by Sharpton and NAN that were were avoided by a settlement with federal prosecutors, NAN has approximately $1.348 million in overdue state and local, and federal, taxes and penalties according to KBL's audit. NAN has responded by assuring that the problems are being addressed, including NAN's solvency, which is being temporarily resolved by "seven-figure" contributions from Sharpton and other NAN board members.