[Southack]

The ironic aspect is that the NAACP is such a bad manager of money that it is unlikely to make any profits on which to be taxed. The smart play would have been to have forfeited their tax exempt status after Bond's speeches...the consequences would merely have been to have paid taxes on organizational profits (if any).

Now they are risking jail and asset confiscation, along with appearing in public as defiant blowhards.

They chose a decidedly unclever strategy. Perhaps they've grown accustomed to such tactics working in other fields, but that hardly makes such sillyness the thing to bet your organization on...against the IRS.

[Purple GOPer]

The importance of the tax exempt status is not so the NAACP avoids paying taxes on profits (as a non-profit it technically doesn't have any) but so the people who contribute to it can take the money donated off of their taxes.

If the NAACP was deemed to be a political action committee they would receive a lot less money.

[libstripper]

There would be another, very serious consequence. The NAACP, like many other so-called "charities," is an active political organization, although it is a 501(c)(3) organization. 501(c)(3) organizations are generally prohibited from supporting or opposing political candidates (an absolute prohibition) and are more generally prohibited from lobbying, subject to a group of complex conditions and formulas. A 501(c)(3) organization gains a tremendous double benefit from that status: 1) the people and organizations that contribute to 501(c)(3) entities are allowed to deduct those contributions from their taxable income and 2) a 501(c)(3) doesn't have to pay taxes on any "profits" it makes from activities related to its charitable purpose.

Thus, although the NAACP might not have any "profits" to be taxed even if it were a for profit organization, it would still be terribly injured by losing its 501(C)(3) status, since its contributors could be subject to taxes on contributions they had already made and deducted and on future contributions. Most of the major corporations in the U.S. presently contribute tribute to the NAACP and deduct it and are able to appoint members to the NAACP board. If this IRS injury goes forward, it will have a huge impact on the NAACP's contributors who, in turn, put might apply serious pressure on the NAACP to moderate its Marxist positions.

A successful IRS challenge to the NAACP will also be a powerful warning to the numerous other left wing 501(c)(3) organizations that are and have been abusing their tax exempt status and induce them to moderate their positions.