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CAIR faces tax troubles

I guess it was about a week ago that I first saw the news that the Council on American-Islamic Relations was in some trouble with the IRS. The Investigative Project on Terrorism reported that the group was one of 275,000 to lose its tax-exempt status following three years of failure to file a Form 990. CAIR and its affiliated foundation were both on the IRS expunge list. The IRS Form 990s that are missing would include some financial information on donations and other sources of income, basics on operating expenses and the names and payments given to directors and key staff.

The group is a media favorite and reporters frequently go to the group when discussing anti-Muslim bias. The group has also faced scrutiny for its involvement in a Hamas-financing case and allegations of foreign funding.

Anyway, the story was picked up by just a few mainstream outlets pretty quickly. For instance, Ben Smith at Politico got mixed explanations from the group:

A CAIR attorney initially told POLITICO that its appearance on the IRS list referred to a defunct arm of the nonprofit, and that CAIR and CAIR foundation were unaffected -- a claim that a review of the IRS documents did not support. CAIR then told POLITICO the IRS was to blame, citing a number of other errors that have occurred on the IRS list. However, CAIR could not produce their IRS disclosure forms for 2007 through 2010 -- which are required to be open for public inspection.

A spokesman told FOX that the group was being targeted:

"This is a technical paperwork issue that we're dealing with with the IRS -- as 275,000 other groups, including the AARP and major universities," [Ibrahim] Hooper said, before suggesting that reporting on its lost status was part of an effort to spread anti-Muslim "hate."

But I didn't see any treatment that really looked at the group and the IRS situation in detail. But a few days ago, an article did just that in the Tennessean. The report is very straightforward and thorough:

CAIR was among 275,000 nonprofits nationwide stripped of tax-exempt status this month by the Internal Revenue Service. None of the groups filed required tax returns, known as Form 990s, for three years, and any donations to them can be taxed, the IRS reported.

CAIR spokesman Ibrahim Hooper said his group filed accurate, on-time returns but lost its tax-exempt status over an incorrect filing from several years ago. But employees couldn’t produce CAIR’s latest Form 990 this week, and critics suggest the charity avoided filing to hide financial dealings from the public.

Local Muslim leaders said they were surprised to hear the news about CAIR’s problems with the IRS. CAIR attorneys helped oppose Tennessee Senate Bill 1028 and House Bill 1353, which targeted some practices outlined in Shariah law, Islam’s code of conduct.

It's nice to see the local clergy queried on the matter. The article also notes that other Muslim groups are compliant with the IRS, including the Muslim Public Affairs Council. The article looked at the issue from many angles. Farhana Khera, who works to train Muslim charities and mosques on good governance, talks about charitable activities and how they relate to Islamic values. We get a little debate on the Holy Land Foundation issue. And we even hear from Muslims who think CAIR wrongly claims to speak for all Muslims in America. I'm sure you can imagine many articles that would have skipped over all of those points.

Rather than rely on other media reports, reporter Bob Smietana actually had a Washington bureau reporter try to get the tax returns by going to CAIR offices in person. Federal regulations require that nonprofit tax returns be available to the public upon request but CAIR was unable to provide them.

It will be interesting to see how this story develops, whether the group does reapply for reinstatement or not. If it does, the forms might provide some key information about where the group gets its funds. If it doesn't reapply or isn't recognized by the IRS, will that affect the group's relationship with the media?

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