Serious tax questions for the nonprofit group that runs Charlotte auto fair

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By Paul Boyd

CHARLOTTE, N.C. — The AutoFair at Charlotte Motor Speedway attracts thousands of visitors every year.

The event generates millions of dollars in revenue for a group called the Hornet's Nest Region of the Antique Automobile Club of America.

The Hornet's Nest is classified as a tax-exempt social welfare organization under section 501(c)(4) of the IRS code.

However the IRS says these nonprofits must be operated primarily to promote the common good of the people of the community, and an organization that primarily operates as a social club is not exempt from paying taxes.

Steve Stillwell is the former chairman of the Hornet's Nest financial review committee. He came forward to blow the whistle on the nonprofit.

"The majority of their net profit is going to benefit nothing but the members themselves. I worked for a number of nonprofits and I'm a Christian person and it just ain't right," Stillwell said.

Stillwell showed Whistleblower 9 investigative reporter Paul Boyd what he said are internal budgets from his three years inside the nonprofit.

"They have spent, in any given one year we know of, over $300,000 on member benefits," according to Stillwell.

He said members enjoy luxurious all-expense-paid trips, including river cruises,  five-star dinners and fancy hotel rooms.

"We're partying. We're going to museums. We're going to whatever. And we have a big banquet when we're there and it's all paid for by the club," Stillwell said.

Stillwell believes the nonprofit has spent upwards of $3 million on member benefits over the past 10 years.

The nonprofit’s executive director, Mel Carson, agreed to an interview.

  • Boyd: Your organization pulls in about $1.7 million a year, but correct me if I'm wrong, you haven't paid a penny in taxes?
  • Carson: Well, that's the nature of being a nonprofit.
  • Boyd: But why do you believe you qualify as a nonprofit when you have such lavish member benefits? Almost $300,000 a year going towards your membership?
  • Carson: Because we've gone through the legal and accounting process to do that.

Whistleblower 9 discovered the Hornet's Nest Region made a basic mistake on its tax documents.

For at least the past five years, the organization has checked the "no" box when asked by the IRS if it received membership dues.

Records show the club collected more than $14,000 in membership dues every one of those years.

  • Boyd: Why do you say "no" on this official tax form, Mel?
  • Carson: Well, I don't know. It looks like a mistake, doesn't it.
  • Boyd: Well, it certainly looks inaccurate.
  • Carson: Well, I certainly think we'll get that straight. That's one of the reasons we're doing a complete audit. Legal and accounting.

Stillwell told Whistleblower 9 that he doesn't believe the group has any intention of changing.

"They know exactly what they're doing and they've been doing it for years and years and years,” he said.

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