Losing Tax-Exempt Status for Not Filing CAIR’s Required Tax-Returns for 5 Years

Awad violated the law governing nonprofit organizations by failing to meet the minimum standard of professionalism and ethical responsibility.

Nonprofit organizations have a legal duty to file their financial statements declaring their sources of income to the Internal Revenue Service in order to maintain their tax-exemption status. Maintaining that status is the most basic function of any nonprofit governance structure: the board of directors, the executive director and the staff. Without that exemption, all the group’s donations and assets can be subject of taxation. In other words, failing to file the mandatory annual declaration with the IRS once is a serious lapse of judgement, and a violation of the law.

Awad failing to file for several years in a row can be interpreted as an attempt to hand funding sources and asset. this reflects a very poor standard of professional conduct and arguably a serious ethical deficit in CAIR’s leadership as was revealed by Politico: 

“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.

“We are looking into all of these issues and are working with the IRS to clear things up,” CAIR spokesman Ibrahim Hooper told POLITICO. “CAIR was clearly not targeted or singled in any way by the IRS.”