Inside Politics

North Carolina Republican Party takes aim at liberal NC Progress group

Wednesday, September 25, 2013

The North Carolina Republican Party took aim at the liberal activist group Progress NC this week in an email claiming it's dodging taxes and duping donors with questionable fundraising tactics.

"You can't represent that you have tax exempt status when in fact you don't have tax exempt status," said Wake County GOP attorney Robert Shaw.

Among the GOP allegations is that Progress NC's charitable solicitation license with the state - which allows them to ask for donations - is expired.

The Secretary of State's website, though, which the GOP email directed us to, says it's current.

Progress NC Executive Director Gerrick Brenner said that they did let it lapse, but renewed it weeks before the Republican attack.

"The links that they include refute the claims they make," he offered.

But Shaw honed in on a different allegation in the email that also deals with donations and the IRS.

Again, we were directed us to the Secretary of State's website, which lists Progress NC as a non-tax-exempt entity.

Shaw says that means they can't tell supporters donations are tax deductable - a claim made front and center on Progress NC's website.

"They're required to disclose that contributions are not tax deductible and they've been doing the opposite," said Shaw.

But Brenner says they applied for tax-exempt status with the IRS months ago, and as it turns out, that makes a big difference.

"They can operate as though they are tax exempt during the pendency of the application," explained Raleigh tax attorney Marty Martin.

Martin actually advises the IRS on non-profit issue and says - if an application is pending - a non-profit can solicit and accept donations. And, they're deductable as long as the IRS determines that the non-profit is acting within the law.

Martin, an outspoken advocate for transparency, says non-profits should be up front with their donors. "Should they disclose to donors that they have an application pending to the IRS? Yes, I think so," he said. "But there's no absolute requirement that they do that."

Martin says Progress NC is actually doing what most non-profits do. And, he says nine out of 10 non-profits do get the stamp of approval from the IRS.

As for the GOP's calls for an investigation, a spokesperson for the Secretary of State's office said it has changed Progress NC's status to "not determined," and recognizes it has applied for, but not received an IRS stamp of approval. The Secretary of State's office does not intend to launch an investigation.

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