News & Analysis

NHRA on the IRS radar screen now

No one should be surprised that someone who felt wronged by the NHRA has taken the step of making the IRS aware of the NHRA and its operation. After all, the NHRA has been run as a dictatorship for more than 50 years, answering to no one and especially not to the so-called NHRA “members”.

The surprise is that someone with the money and inclination to hire a very well known law firm that does business in Washington, DC, decided to spend his or her money to put the NHRA under the IRS spotlight, questioning the legitimacy of the “not for profit” status. The person or persons who are behind this attack on the NHRA probably won’t benefit financially by this action.

Over the 30+ years I have been a drag racing journalist I have talked to and listened to many, many people who questioned the legality of the NHRA to operate as it has without any outside supervision. Many thought that the NHRA ought to be investigated by the IRS.

For the past year or so I have been getting correspondence from an anonymous source telling me that a group of racers, who were convinced that the NHRA was operating illegally under section 501(c) rules, were going to pay a legal expert to research the issue and take the NHRA to task. 

Frankly, I just never believed that anything would come of this, just as nothing came from any of the previous “threats” to expose the NHRA I’ve heard over the years. I was way wrong this time. This time the racers or fans that felt wronged by the NHRA put a considerable amount of time and money where their mouths were. The results of their work may -- and I stress the word may -- result in some big changes in the way the NHRA operates or even in the dissolution of the NHRA altogether.

I’m not so concerned with what might happen with the current NHRA. I feel certain that the current political climate in this country regarding taxation and the country’s 14 trillion dollar deficit, along with the fact that the IRS has added many new employees, means that the NHRA is going to get a very thorough auditing. If they have been circumventing the laws the NHRA as a company will pay the piper. But I doubt any of the upper management of the NHRA or the Board of Directors (who’ve been collecting fat salaries that many of us think are out of whack for a not-for-profit company) will suffer.

What I am concerned with is if the NHRA as we know it now ceases to exist, what will its replacement be like?

I believe that if the NHRA becomes a for profit organization (business) then a lot of the classes and traditions that are so cherished by those mad at the current management will be eliminated immediately. Can you say Sportsman? Take that to the bank, brother. It could be broken into two organizations like the IHRA Sportsman and the Nitro Jam pros.

As someone once said and it has been proven to be a wise comment over the decades, “Be careful what you wish for.”

We received a copy of the actual paperwork filed with the IRS a couple of days ago. It is printed below without any edit. I’m no expert on this but after reading it I think the NHRA is at the very least in a for a long and expensive legal battle -- and guess who will be paying for that, my fellow NHRA members.

Here is a link to the entire letter sent to the IRS.