Richard Spencer, white nationalist and president of the National Policy Institute, speaks at Texas A&M University in College Station in December. (David J. Phillip/Associated Press)

The U.S. tax system contains a valuable benefit for prominent white-nationalist groups, which for years have enjoyed a legal status that allows them to not pay levies and lets supporters write off their donations. This status also, for tax purposes, puts them in the same legal category as zoos, colleges, museums, orchestras and planetariums.

It's a lucrative classification. Four well-known organizations associated with white nationalism — the National Policy Institute, the New Century Foundation, the Charles Martel Society and VDare Foundation — have raised $7.8 million in tax-free donations over the last decade, according to a recent analysis by the Associated Press.

Their tax status is getting renewed scrutiny after the 2016 election, in which white nationalists openly and widely championed President Trump, raising their profile in American politics and adding overtly racist voices that were not part of the national dialogue in recent elections.

In a new proposal, legal expert Eric Franklin Amarante of the University of Nevada at Las Vegas is calling on the Internal Revenue Service to change the rules. His proposal, which he published online, would force white nationalist groups to start paying taxes by removing the provision they rely on for their tax exemption, a broad rule that benefits organizations that sponsor lectures, conferences and public discussions.

“They get the assumption — the benefit of the doubt — that they are operating in the public’s interest, that this is a worthy organization,” Amarante said. “Is this really how we want to operate? Do we really want to give the federal government's seal of approval, the imprimatur, to these organizations?”

The white nationalist movement has its intellectual roots in an old tradition of justifying racial prejudice through appeals to nonscientific theories of human evolution. The movement's adherents generally espouse discredited ideas about race, arguing that there are important hereditary differences between people of different races. Many also oppose racial integration and support a separate state for whites.

Self-proclaimed white nationalist Richard Spencer spoke at Auburn University Tuesday, April 18. His visit sparked protests that turned violent and led to three arrests. (YouTube/Ryan Crumpler)

Recently, white nationalists have tried to distinguish themselves from white supremacists, an older term associated with terrorist groups such as the Ku Klux Klan. White nationalists say that they do not believe that whites are superior to people of other races or that they should have more power in society. (Peter Brimelow, who is in charge of the VDare Foundation, said the group's website is not white nationalist, but that some writers who contribute to it could be described using that term, the Associated Press reported.)

White nationalists also make use of anti-Semitic themes, and supporters often show off Nazi salutes.

But even organizations that condemn white nationalists' messages are hesitant about proposals to take away their tax-exempt status. Indeed, major advocacy groups for charities and not-for-profit groups argue that as long as white nationalists do not advocate violence or get directly involved in politics — a prerequisite for their current status — they should be exempt from taxes.

The white nationalist groups qualify for tax-exempt status because they have successfully argued that they have an “educational” mission, and charity advocates are uncomfortable with an arrangement in which the IRS decides which groups qualify for that educational status based on their messages.

“It is explicitly not the IRS’s job to make a political judgment on whether they like the content,” said Hadar Susskind of the Council on Foundations, a philanthropic coalition that defends legal protections for donors and charities. “If there’s a hate group that’s out there doing something bad, that’s an issue for the FBI, not the IRS.”

Groups in this category that receive tax-deductible donations are known as 501(c)(3) organizations. You “don't have to like all the people in the (c)(3) category to recognize that in our society we need all views expressed,” said David Thompson, a vice president at the National Council of Nonprofits, which advocates for charities. “We don’t make decisions on (c)(3) status based on whether we like their views or not.”

While fringe groups associated with the extreme left could in theory apply for the same tax-exempt status, they do not appear to be taking advantage of that provision currently, according to the Southern Poverty Law Center, an organization that monitors hatred and prejudice.

Americans have been able to write off donations when they pay their taxes for a century, and the rule has become part of the country's culture of charitable giving. Americans donated an estimated $373 billion in 2015, according to Giving USA, a group based in Chicago that monitors charitable contributions. Allowing taxpayers to write off that money costs the federal government about $60 billion a year in forgone revenue, according to the nonpartisan Joint Committee on Taxation.

About $10 billion of that total benefits educational organizations and their donors. This category includes white-nationalist groups such as the National Policy Institute, although only a tiny fraction goes to these groups.

Amarante's solution is to entirely eliminate the category of educational organization for groups that offer “public discussion groups, forums, panels, lectures, or other similar programs.” That is the criterion that many white-supremacist groups use to qualify for their “educational” tax-exempt status. Getting rid of it would allow the IRS to tax those organizations without having to pass judgment on their political leanings.

But that change could also jeopardize the status of respected nonpartisan research organizations, such as the Brookings Institution, or any group with privileges based in part on holding talks and conferences.

“The question is: Do we want to subsidize this type of organization?” Amarante said. “If so, we need to come up with an implementable, clear definition of a nonpartisan think tank.”

Leaders from the white-nationalist groups defended their status.

“We are an educational organization, just as many other educational organizations take a particular point of view,” said Jared Taylor, president of the New Century Foundation, which has had tax-exempt status from the IRS for more than two decades. “We have been scrupulously abiding by IRS regulations since 1994.”

(The National Policy Institute recently lost its special status after failing to turn in the required paperwork, but experts said that decision was probably part of a general crackdown at the IRS this year and not a result of the group's beliefs. Richard Spencer, the group's president, said he expected to rectify the issue soon. “It was a big snafu,” he said. “My hope is that within six months, we’ll be back in good standing.")

Questions of tax exemptions and politics have long been thorny issues for the federal government, which is tasked with enforcing the law without the appearance of bias. The IRS was embroiled in scandal for months after some employees were found to have targeted tea party groups for extra scrutiny as they screened for whether the organizations seeking tax exemptions were complying with the rules.

Last week, President Trump signed an executive order designed to make it easier for churches — another category of tax-exempt groups — to participate directly in politics. Officially, they are barred from doing so, although whether the order would have an immediate practical effect was unclear.

During the campaign, Trump said he hoped to eliminate the rule against political participation completely, which would also make it easier for charities and educational groups to intervene directly. That category would include, among many other organizations, white-nationalist groups.

Note: This post has been updated with information from the Southern Poverty Law Center on the tax status of extreme-left organizations.