Article Aug 8, 2014

Tax man cometh? The IRS and church politics

Recent news indicates that the IRS may be taking steps to monitor any political efforts churches decide to take.

In 2012, the Freedom from Religion Foundation (FFRF) out of Madison, Wis., filed a federal lawsuit against the IRS for charges that they neglected to pursue complaints against churches and other religious organizations “electioneering” during the 2012 election season. The group claims to have submitted 27 complaints that were never explored.

According to National Review:

According to a June 27 IRS letter to the Justice Department, 99 churches merit “high priority examination” for allegedly illegal electioneering activities. The letter was sent in reference to a now-dismissed lawsuit filed by the atheist group known as the Freedom from Religion Foundation (FFRF). The suit originally was a rather broad one, demanding not only that the IRS enforce prohibitions against churches’ endorsing candidates specifically, but also that churches should be “required to file” what it described as “detailed annual information” that would force them (if they are like other nonprofits) to “expend substantial time and resources.”

With the end of the suit, those filings presumably will not be required (though a second suit, on just that subject, remains open). But IRS’s monitoring of alleged electioneering activities could still be quite onerous.

Churches who have 501(c)(3) status are supposedly allowed to address questions of morality, ethics, and general politics, but the IRS’s website also says, “Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. The prohibition applies to all campaigns including campaigns at the federal, state and local level. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”

It continues, “Even if a statement does not expressly tell an audience to vote for or against a specific candidate, an organization delivering the statement is at risk of violating the political campaign intervention prohibition if there is any message favoring or opposing a candidate.”

The IRS recently reached a settlement with FFRF, saying it has established a method for monitoring church political activity. Satisfied with the IRS’s accommodations, FFRF requested the court dismiss the lawsuit.

“Our legal action has ensured that churches cannot act as unaccountable Political Action Committees using tax-exempt dollars to influence the outcome of elections,” FFRF co-president Dan Barker said.

Based on the Freedom of Information Act, Alliance Defending Freedom (ADF), a Christian legal organization, has rightly responded by requesting the IRS release all information regarding the settlement and terms of investigation with FFRF. ADF correctly asserts that the public has the right to know how the IRS plans to monitor churches in the future.

“We are asking the IRS to disclose the new protocols and procedures it apparently adopted for determining whether to investigate churches. What it intends to do to churches must be brought into the light of day,” an ADF spokesman said.

Onlookers have a right to remain skeptical at the IRS’s activity. Their track record of non-partisan activity is of course in shambles after recent discoveries were unearthed that IRS employees applied extra layers of scrutiny to conservative non-profit groups. With a tainted reputation in place, one is right to hold the IRS’s scrutiny of churches with extra suspicion. As Quin Hillyer of National Review writes,

If government dares to forbid preachers from mere religious instruction — while the preachers still leave it up to their flocks to apply that instruction according to their understanding and their consciences — then there is nothing to stop government from infringing on other pulpit pronouncements with ever-more-intrusive regulatory strictures. The standard suggested by FFRF would be far more than a gentle slippery slope toward trammeled religious freedom; it would be an avalanche that buries and then asphyxiates liberty.

Should the IRS’s tactics ensue, one would hope that they would apply a modicum of fairness and determine whether traditionally liberal churches are engaging in the same level of activity that is now deemed worthy of monitoring according to IRS’s terms.

For now, the main issue is determining the criteria that the IRS considers as political or electioneering activity.

Churches differ on the wisdom of endorsing candidates as a matter of their formal organization and worship. But a decision to rightly refrain from endorsing candidates is not an excuse to abdicate political responsibility, which certainly includes the importance of voter education on key moral and ethical issues relevant to the Christian faith. The actions of the IRS make these distinctions more ambiguous and wrought for potential government interference.