A cloak of financial secrecy is being lifted from a White nationalist group that drew international attention for its Nazi salute to President Donald Trump after he won the November election.
The IRS stripped the nonprofit National Policy Institute’s tax-exempt status on Monday for failing to file tax returns with the federal government, the Los Angeles Times reports.
Since 2013, the organization, led by Richard Spencer, had not filed financial returns. Under IRS rules, a failure to file for three consecutive years results in an automatic loss of tax-exempt status, according to the Times.
Spencer, who has been a lightning rod of racial controversy, told The Times that an IRS error led the organization to believe it was not required to file federal tax returns.
“I don’t know what to say. I don’t want to make a comment because I don’t understand this stuff. It’s a bit embarrassing, but it’s not good. We’ll figure it out,” said Spencer, adding that the organization plans to appeal the agency’s decision.
Back in December, the Washington Post asked the IRS why it placed the organization in the category of nonprofits that are not required to file tax returns. That allowed the group to raise donations to promote its racist ideology and possibly engage in political activities without scrutiny. The IRS, however, declined to give the Post an explanation.
The IRS corrected its error in February and revoked the organization’s tax-exempt status retroactively, as of May 15, 2016, according to the Times.
Both the Post and Times quote tax experts who said the organization should have recognized the IRS’ error. So, there’s no excuse for not filing federal taxes, they said.
Prior to Trump’s presidential campaign, the organization operated under the radar, promoting White supremacy through obscure sites online. Members of the organization celebrated Trump’s election victory and his selection of Stephen Bannon, a leader in the alt-right movement, as the chief White House strategist.
Spencer is seen in a video shouting “Hail Trump” at his organization’s conference, which elicited Nazi salutes from the audience.