‘Alt-right’ group regains IRS tax-exempt status

FILE - In this Dec. 6, 2016, file photo, Richard Spencer, who leads a movement that mixes racism, white nationalism and populism, speaks at the Texas A&M University campus in College Station, Texas. The Internal Revenue Service has reinstated the tax-exempt status of a nonprofit operated by Spencer, who has been banned from using mainstream online platforms to raise money. (AP Photo/David J. Phillip, File)

COLLEGE PARK, Md. (AP) — The Internal Revenue Service has reinstated the tax-exempt status of a nonprofit operated by white nationalist Richard Spencer, who has been banned from using mainstream online platforms to raise money.

Spencer’s Alexandria, Virginia-based National Policy Institute Inc. automatically lost its tax-exempt status as a 501(c)(3) nonprofit more than a year ago after it failed to file tax returns for three consecutive years.

A letter signed by an IRS official and dated July 12, 2018, informed Spencer that the agency had approved his group’s request for reinstatement. Spencer told The Associated Press on Thursday that he learned of the change in late August.

“When we lost it, it did feel like persecution, to be honest,” Spencer said.

Spencer said the status change is a “nice, small victory” after getting “de-platformed” by online payment processors. He said PayPal and Stripe banned him and his nonprofit from using their services after a deadly white nationalist rally in August 2017 in Charlottesville, Virginia.

Losing access to those services has been a bigger obstacle to fundraising than losing tax-exempt status, Spencer said.

“Most people who donate don’t actually take the deduction,” he added.

Spencer popularized the term “alt-right” to describe a fringe movement mixing white nationalism, anti-Semitism and other far-right extremist views. He was scheduled to speak at the Unite the Right rally in August 2017 before violence erupted in the streets of Charlottesville. A man fascinated with Adolf Hitler plowed his car into a crowd of people that day, killing counterprotester Heather Heyer, according to authorities.

IRS spokeswoman Cecilia Barreda said federal law prohibits the agency from releasing information about specific taxpayers.

Spencer said his nonprofit “went through a long process” to get reinstated by the IRS.

“They’ve looked through everything, and we came out fine,” he said.

University of Pittsburgh School of Law professor Philip Hackney, a former IRS attorney, said he doubts the IRS reevaluated whether Spencer’s nonprofit deserves to be classified as a charitable organization before reinstating its tax-exempt status.

“My guess is probably there is no judgment being made,” he said.

Hackney said nonprofits typically don’t find it difficult to get reinstated after automatically losing tax-exempt status.

“There can be some hoops to jump through that can be a pain, but it’s not super hard,” he said.

Spencer has blamed the revocation on an IRS error that led his group to think it wasn’t required to file tax returns. IRS records indicate that, sometime in 2006 or 2007, the agency mistakenly reclassified the National Policy Institute as one that didn’t need to file tax returns.

The IRS posted a notice of the group’s revocation on its website in March 2017, but the loss of its tax status was retroactive to May 15, 2016.

William H. Regnery II, a wealthy publisher, founded the National Policy Institute in 2005. Spencer has served as the group’s president.

In 2016, an AP review of tax records found that the National Policy Institute and three other groups at the forefront of the white nationalist movement had registered as charities and raised more than $7.8 million in tax-deductible donations over the past decade.

The National Policy Institute raised $697,267 in tax-deductible contributions from 2007 through 2015, according to an AP tally. The group used an address in Whitefish, Montana, on its 2015 tax form. More recently, it used a post office box in Arlington, Virginia, to solicit donations by mail.

On its 2015 tax filing, Spencer’s group says its primary tax-exempt purpose is to “conduct research and nonpartisan analyses and education on public issues, including social, cultural, and governance issues affecting the (U.S.) and other nations in the world.”

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