NAACP Audit Raises Questions Over IRS's Role In Politics

by Leroy Baker, Tax-News.com, New York

05 September 2006

The Internal Revenue Service has ended a controversial multiyear investigation of the National Association for the Advancement of Colored People (NAACP) for possible violations of the organization’s tax-exempt status.

The IRS launched an examination of the NAACP, the oldest civil rights group in the US, on October 8, 2004 after receiving complaints from several Republican members of Congress that a speech by Chairman Julian Bond was critical of President George W. Bush's policies.

Under 501(c)(3) of the US tax code, tax exempt organizations are "expressly prohibited" from campaigning for or against a public official.

However, the move was seen as controversial as it came one month before the 2004 presidential elections, and some critics of the Bush administration have accused it of using the IRS to gag its opponents.

The NAACP says that the IRS refused to explain the basis of its investigation for more than a year, and the organization learned the reason for the examination only after filing four Freedom of Information Act requests (FOIA).

“It’s disappointing that the IRS took nearly two years to conclude what we knew from the beginning: the NAACP did not violate tax laws and continues to be politically non-partisan,” said NAACP President and CEO Bruce S. Gordon

“Tax-exempt organizations should feel free to critique and challenge governmental policies under the First Amendment without fear of IRS intervention," he added.

The documents included complaints filed by Senators Lamar Alexander (R-Tenn.) and Susan Collins (R-Maine), then-Senator Strom Thurmond (R-S.C.), Representatives JoAnn Davis (R-Va.) and Larry Combest (R-Texas), then-Representatives Robert Ehrlich (R-Md.) and Joe Scarborough (R-Fla.).

The decision by the IRS to lift its audit was welcomed by Sen. Max Baucus, the senior Democrat on the finance committee, but he expressed concern over the agency's motives for the probe.

“The American public expects and deserves a high degree of non-partisanship and professionalism from the IRS, and I’m still not certain that this investigation, launched immediately before the 2004 presidential election, met those standards," he stated.

IRS Commissioner Mark W. Everson has vehemently denied accusations of political bias.

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