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For-profit halal board claims tax-exempt status

January 24, 2012

Wahhabi-backed U.S. halal certifier pays top officers 6-figure salaries, gets $5 million in business income, claims public charity status

If a food manufacturer wants to call its products halal, and obtain a label that attests to its halal compliance, that manufacturer must submit an application for review by a halal certification organization.

In the U.S., halal certifiers are not government entities and, unlike organic food certifiers, are not accredited by the government.  The halal boards are privately run.

One of the largest halal groups is the Islamic Food and Nutrition Council of America (IFANCA), a Chicago-based multi-million dollar enterprise.  But as Family Security Matters has noted, “There are very few transparent news reports of the expansion” of the halal industry in North America.  The time has come for fuller scrutiny.

First, IFANCA proclaims on its own website that it is recognized and endorsed by the Saudi-based, Wahhabi hegemon Muslim World League.  The MWL has funded Al Qaeda, Hamas, and other terrorist organizations throughout the world in an effort over several decades to export and ingrain Wahhabism across the planet.  But this doesn’t seem to bother IFANCA.

Second, IFANCA claimed tax-exempt status in its 2010 tax return even though the vast majority of its reported revenues comes from “inspection fees.”  These are fees that IFANCA charges to food producers for the “privilege” of sporting IFANCA’s halal food logo.  Such fees sound a lot more like ordinary business income that should be taxable rather than charitable or “public” contributions which would qualify the entity for tax-exempt status.  IFANCA’s Form 990 showed $5,519,829 in inspection fee revenue.  Its only other reported revenues were $14,466 in gifts.

To qualify for tax-exempt status, a charity needs to get over one-third of its income from donations or grants and no more than one-third of its income from business activity.  With 100 percent of its income from apparent business activity, IFANCA falls far short of federal standards for a nonprofit charity.  (IFANCA’s six-figure salaries to its president and vice-president documented in its tax returns may also raise a few eyebrows.)

IFANCA casts itself as an educational entity of sorts, promoting “knowledge” and “community development” with respect to halal foods.  But it does not base its claim for public charity status on its educational or religious mission, but rather by describing the inspection fees as public contributions.

IFANCA’s tax approach makes it relatively unique among food certification groups such as organic, vegan, and kosher certifying entities.  Several U.S. organic food certifiers are tax exempt on the bases of Section 501(c)(5) of the Internal Revenue Code because they have an agricultural mission—not on the basis of any professed public charity mission under 501(c)3.

The Vegan Awareness Foundation, which is a major certifying entity for vegan foods, maintains tax-exempt status on the basis that it receives a substantial portion of its revenues from donations or grants—not from site inspections.

Many kosher certifying entities are set up as regular businesses and pay taxes.

The IFANCA case illustrates a flawed federal system that accepts 99 percent of all claims for tax-exempt status.  The IRS can start making amends by revoking IFACNA’s tax-exempt status.

Moreover, due to its tax-dodging behavior and World Muslim League affiliation, consumers should avoid buying any IFACNA-certified foods, and grocers should refrain from stocking their shelves with such products.

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10 comments

  1. Thanks this is very informative. I am glad you made the comparison to both Vegan and Kosher certificers. Would you still express the same concerns if halal certifiers’ non-profit status was based on 501(c)(5) and not 501(c)(3)?

    More important than the section of the tax code under the halal cerifier you featured is organized, or the salaries of its executives is its association with the Muslim World League.


  2. Credo che si fanno errori. Cerchiamo di discutere di questo. Scrivere a me in PM, ti parla.


  3. Have you checked out the tax exempt status of Kosher organizations? Most of them are also registered under 501 (c)5. Many of them also earn millions of dollars for providing certification and supervision. Lastly, their execs also earn six figure incomes for their hard work. It is unfortunate that any thing a Muslim does is seen with suspicion these days. I would urge you to check out the details of Star K Kosher.


    • Yes, I’ve researched several major kosher certifiers, and it is very incorrect for you to say that “most of them” are registered under Sec. 501(c)(5)s.

      Why don’t YOU check out the details of Star-K and let us know what you find?


  4. Star K Certification is registered as 501 (c) (3). It has receipts of $7,738,630. Most of its income is from supervision and certification. Pls check it out.


  5. A correction to my earlier post it should have read that most Kosher certification agencies are registered under 501 (c) (3).


    • And what is Star-K’s business revenue ratio relative to its gift/donation ratio?


  6. […] Relations under the Foreign Agents Registration Act.  Strip the halal food certifier IFANCA and the mosque deed financier North American Islamic Trust of their tax-exempt […]


  7. […] Jihad has previously revealed IFANCA’s links to the Saudi-based terror financing Muslim World League.  Now, FrontPage Mag has […]


  8. […] Jihad has previously revealed IFANCA’s links to the Saudi-based terror financing Muslim World League.  Now, FrontPage Mag has […]



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