The nonprofit organization run by prominent white nationalist Richard Spencer has been stripped of its tax-exempt status after failing to file financial returns for three years.
Spencer blamed the mistake on a former bookkeeper and said he had already begun the reapplication process, which could take months.
The institute, which promotes a form of American apartheid, has functioned as a public charity that relies heavily on contributions. The IRS almost always requires such organizations to file returns that detail where the money comes from and how it is spent. For reasons the agency still hasn't explained, Spencer's group had been categorized among those not obligated to file any returns whatsoever, according to an examination by the Post.
Tax experts asked to review the case by The Post last year said they believed the classification was erroneous and should be fixed — and, when it was, they predicted that the institute would lose its tax exemption.
Despite the IRS’s miscue, the experts added, Spencer still had a duty to provide the documents, known as Form 990s. The error allowed the institute to avoid public scrutiny at a time when the alt-right — the term Spencer coined to describe a movement seeking a whites-only state — had garnered international attention.
When Spencer was first asked about the issue, he said he didn’t even know that his organization hadn’t been filing returns. The blunder and its fallout, he said, led him to fire the firm that handled his accounting.
“ The people I delegated this task to really screwed up. I’ll take responsibility,” he said. “We solved the issue, but now we’re facing the consequences.”
The institute, he said, will temporarily halt its fundraising “until we get all of our i’s dotted and t’s crossed.” He predicted that it could take anywhere from one to six months to find out if they’ll regain the tax-exempt status.
The setback, Spencer said, shouldn’t devastate the institute’s fundraising efforts, in part because many donors wish to remain anonymous and wouldn’t claim the tax deduction anyway.
The IRS has given him no reason to believe that the revocation, first reported this week by the Los Angeles Times, was politically motivated, Spencer said, adding that he would only question the agency's motivation if it rejected his reapplication.
“I’m obviously going to respect their decision because mistakes were made on our end,” he said.
Before this year’s presidential campaign, Spencer and his fellow alt-right members had promoted their pro-white ideals mostly in online obscurity. But President Trump’s rhetoric on undocumented immigrants, Muslims and political correctness helped introduce their cause to the mainstream.
Spencer drew international attention in November when video of him shouting "Hail Trump!" at a white nationalist conference — and the Nazi salutes his declaration elicited — went viral. The night before, at a private dinner for conference attendees, Spencer had joked that they should "party like it's 1933," referencing the year Adolf Hitler was appointed Germany's chancellor.
Groups that monitor Spencer and other white supremacists were unaware that the IRS had not demanded that his organization file returns, and they objected when they were informed by the Post last year.
“If they’re going to claim tax breaks for their donors, we should know where the money is coming from and what the money is being spent on,” said Southern Poverty Law Center spokeswoman Heidi Beirich. “It’s important for the IRS to hold them to the same standard they hold the rest of us.”
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