Confusion Over IRS Tax Exemption Revocation for Hundreds of NAACP Affiliates

There have been a number of media reports regarding the apparent IRS revocation of tax-exempt status for hundreds of NAACP state and local affiliates, which are section 501(c)(4) organizations. For example, The News & Observer, in discussing a conflict between a state affiliate and the national NAACP, included this entry about the revocations:

After The N&O discovered and asked national leaders about the large number of tax-exempt lapses, the NAACP’s general counsel sent a letter to state conferences suggesting the IRS was at fault.

“It has (been) brought to our attention that several NAACP Units received letters from the Internal Revenue Service indicating that their tax-exempt status has been revoked,” Wallace, the NAACP’s general counsel, wrote. “This is an error because individual NAACP Units are not required to file Form 990s of their own.”

The problem may relate to a the group return filed by the national NAACP, and whether the affiliates were properly included in that return. According to the news report, more than 800 affiliates have been affected, including several state conferences.

Lloyd Mayer