U.S. tax authorities ignore illegal political activities by churches

Yesterday I kvetched about a Baptist preacher in Texas, Robert Jeffress, who was apparently violating the U.S. government’s stricture against religious figures campaigning in an illegal way for and against Presidential candidates.

To retain their unconscionable tax-free status with the Internal Revenue Service (IRS), U.S. churches and their pastors cannot engage in “official” political activity. The U.S. tax code for religious organizations says this:

Under the Internal Revenue Code, all IRC section 501(c)(3) organizations, including churches and religious 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. Contributions to political campaign funds or public statements of position (verbal or written) made by or on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise tax.

. . . for their organizations to remain tax exempt under IRC section 501(c)(3), religious leaders cannot make partisan comments in official organization publications or at official church functions. To avoid potential attribution of their comments outside of church functions and publications, religious leaders who speak or write in their individual capacity are encouraged to clearly indicate that their comments are personal and not intended to represent the views of the organization.

Jeffress was, from the pulpit, urging his flock to vote against Obama and, later, for Mittens. I noted that this violated the tax laws, and wondered why his church wasn’t in trouble.

The  answer is that the IRS isn’t even bothering to investigate such breaches. According to boston.com,

The IRS monitors religious and other nonprofits on everything from salaries to spending, and that oversight continues. However, Russell Renwicks, a manager in the IRS Mid-Atlantic region, recently said the agency had suspended audits of churches suspected of breaching federal restrictions on political activity. A 2009 federal court ruling required the IRS to clarify which high-ranking official could authorize audits over the tax code’s political rules. The IRS has yet to do so.

Dean Patterson, an IRS spokesman in Washington, said Renwicks, who examines large tax-exempt groups, ‘‘misspoke.’’ Patterson would not provide any specifics beyond saying that ‘‘the IRS continues to run a balanced program that follows up on potential noncompliance.’’

However, attorneys who specialize in tax law for religious groups, as well as advocacy groups who monitor the cases, say they know of no IRS inquiries in the past three years into claims of partisanship by houses of worship. IRS church audits are confidential, but usually become public as the targeted religious groups fight to maintain their nonprofit status.

. . . [Marcus ]Owens, who was with the IRS through 2000, said the agency had once initiated between 20 and 30 inquiries each year concerning political activity by churches or pastors. He said he knows of only two recent cases the IRS pursued against houses of worship or pastors, and neither involved complaints over partisan activity.

‘‘What the IRS is desperate to do is to avoid signaling to churches and pastors that there is no administrative oversight,’’ Owens said. ‘‘The IRS has been vigilant with regard to civil fraud and criminal cases, but those aren’t all that common.’’

The tax code allows a wide range of political activity by houses of worship, including speaking out on social issues and organizing congregants to vote. But churches cannot endorse a candidate or engage in partisan advocacy. The presidential election has seen a series of statements by clergy that critics say amount to political endorsements. Religious leaders say they are speaking about public policies, not candidates, and have every right to do so.

The Billy Graham Evangelistic Association has recently taken out full-page ads in major newspapers, featuring a photo of renowned evangelist Billy Graham, urging Americans to vote along biblical principles. Graham met last month with Mitt Romney and pledged to do ‘‘all I can’’ to help the Republican presidential nominee.

A November 5 editorial in the Los Angeles Times recounts a number of flagrant violations of the tax code. Here’s just one:

  • In Peoria, Ill., Roman Catholic Bishop Daniel Jenky ordered priests in his diocese to read a letter to parishioners the Sunday before the election criticizing “the president” for including contraception in his health insurance mandate. Jenky then warned that “Catholic politicians, bureaucrats, and their electoral supporters who callously enable the destruction of innocent human life in the womb also thereby reject Jesus as their Lord.” He ended with this appeal: “I therefore call upon every practicing Catholic in this diocese to vote. Be faithful to Christ and to your Catholic faith.”

Not only are churches flouting the law, but they’re boasting about flouting it:

. . . And last month, dozens of churches participated in the fifth “Pulpit Freedom Sunday” sponsored by the conservative group Alliance Defending Freedom. Participants were invited to preach about “what Scripture says about the selection of our national, state, or local leaders.” Some preachers sent their sermons to the IRS, essentially daring the agency to investigate them. The alliance boasts that none of those pastors has been punished or censored by the IRS.

If churches are to be given tax exemptions (i.e., no property tax, tax-free housing allowances for ministers), then they can’t engage in political activity. To do so constitutes a government subsidy of religious incursion into politics. The reason the IRS is sitting on its hands is obviously a policy decision from the top, maybe even involving Obama, although that would be strange because political activity by churches usually favors Republicans. As we know, though, Obama is distressingly friendly to religion.

The IRS should stop turning its head away from this stuff. Of course, if America was really serious about the separation of church and state, we wouldn’t be giving such tax exemptions in the first place.

50 Comments

  1. Posted November 13, 2012 at 5:58 am | Permalink

    Being a Brit I’m not familiar with IRS. Are the IRS required to investigate specific complaints from members of the public? If there were enough complaints could they ignore them? If a citizen makes a complaint is there any way of finding out if it is being acted on?

    • RWO
      Posted November 13, 2012 at 10:14 am | Permalink

      (1) The IRS is legally responsible for implementation of existing tax codes, including investigation of both misfeasance and malfeasance, any time the agency is aware of the commission of either; (2) complaints are plentiful and obviously do not result in action; (3) a specific citizen’s complaint can be tracked via a number of processes, but (particularly in the instance of complaints about religious organization tax code abuse) the complainant is obliged to monitor the progress of submitted grievance(s) to be certain of outcome, including ‘denied.’ This is the only way to have a chance of determining whether a submission receives no attention because it is either lost or simply ignored.

      Sufficient political will presently does not exist to either corral abuse by religious entities or to reform the tax code re tax exemption statute. Such measures originating with elected officials is, in my opinion, unlikely in the extreme: proposing curbs to religious privilege in the USA entails more of a third rail risk by far than Social Security, Medicare, or Medicaid. Maybe more than all three combined.

      At this point, any attempt to restrain political activity in America spoken from pulpits or promulgated in church/organizational media, including slogans on signs on church property, must well up from grassroots citizen political pressure.

      • Jonny
        Posted November 13, 2012 at 2:33 pm | Permalink

        So basically if Separation of Church and State is separated, Christians will respond by compassionately killing welfare?

        And people believe Christians are confused but generally mean well. They’re confused but not nearly as confused as anyone who imagines that a human who asserts that “God is good” could ever be anything but an admirer of sociopaths.

  2. Posted November 13, 2012 at 6:02 am | Permalink

    Your final sentence was the important one: it makes no sense for churches to have tax-exempt status.

  3. Posted November 13, 2012 at 6:21 am | Permalink

    A court in England recently ruled, in connection with the Plymouth Brethren, that a church activity could not be considered charitable unless it was demonstrated to provide public benefit beyond its own membership. US law is obviously different, and (strangely in view of the supposed secular nature of the Constitution) more favourable to religion.

    But even without a specific religious tax exemption, US churches may well be able to claim charitable status, by describing their activities as educational. IIRC, Newt Gingrich was able to claim charitable status, on these grounds, for ideological campaigning, without having any church connection.

  4. Zugswang
    Posted November 13, 2012 at 6:40 am | Permalink

    Someone on Patheos actually discussed this recently, and it turns out that since 1998, the only IRS official that can legally open an investigation is the secretary of the treasury, because the lower position that could have opened these investigations was eliminated in 1998, and per a court decision, it’s stayed that way, and churches can basically do whatever the hell they like because there’s only one person in the entire country with the legal authority to do anything about it.

    http://www.patheos.com/blogs/wwjtd/2012/11/irs-investigation-of-church-political-activity-redux/

    • John Scanlon, FCD
      Posted November 13, 2012 at 8:00 am | Permalink

      Eliot Ness for Sec Treas!

      Time to put a posse together.

    • Posted November 13, 2012 at 2:23 pm | Permalink

      Bears repeating.

      Alternate source with more legal jargon and technical links.

      Perhaps Jerry might start (and publicize) a petition over at WhiteHouse.gov,

      requesting that President Obama 1) expedite the report and order for the “Amendments to the Regulations Regarding Questions and Answers Relating to Church Tax Inquiries and Examinations”, necessary broaden the authority to determine that there is reasonable grounds to begin a church tax inquiry investigation, 2) provide practical means to achieve the legal standard in the interim by directing the IRS Division Counsel/Associate Chief Counsel, Tax Exempt and Government Entities (presently Victoria Judson) being making preliminary assessments of all presently outstanding complaints, and 3) direct the Secretary of the Treasury, as the juniormost extant authority, to meet at least monthly with her (or her successor) to decide which provisional “reasonable belief” assessments she may provisionally make deserve official “reasonable belief” determinations.

      In short: tell the lady to get on with it, and make Geitner (or his successor) provide the de jure authority, whether de facto having her as Laputian-flapper for his attention or merely rubber stamping her decisions.

      • Posted November 14, 2012 at 12:35 am | Permalink

        “Bears repeating.”

        I had this image of furry mammals burping (after eating porridge, perhaps).

        • Posted November 15, 2012 at 12:29 pm | Permalink

          Google Image search will do much better, if you’re inclined to silly.

  5. Posted November 13, 2012 at 6:46 am | Permalink

    Perhaps making cell phone recordings of illegal church public messages would be a legitimate activity of local atheist groups?

  6. gbjames
    Posted November 13, 2012 at 6:55 am | Permalink

    Many of these churches WANT to be challenged. They think that if the IRS pulls their tax-free status from them they will have a case to take to the Supreme Court and the law will be stricken down on the basis of the First Ammendment… “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech..”

    They could be right given the current makeup of the Court.

    • Zugswang
      Posted November 13, 2012 at 7:29 am | Permalink

      Well, they’re not restricting their first amendment rights, they can say whatever the hell they want so long as they pay the price of admission.

      • gbjames
        Posted November 13, 2012 at 7:51 am | Permalink

        The argument is more (I think) on the “free access thereof” part of the Amendment. Personally, I don’t find that compelling and would want them to “pay the price of admission”, too. But I’m not sure the SCOTUS would rule that way given its current makeup. Remember, they recently decided that money was speech.

  7. Levon
    Posted November 13, 2012 at 6:57 am | Permalink

    Yes, the exemption should be done away, now who’s ready to commit political suicide.

  8. Posted November 13, 2012 at 7:14 am | Permalink

    If the legal wording of the code is this:
    “Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise tax.”

    Please not the word “may”. Not “shall” or “will”. It is toothless in the way the law wads written. This is intentionally sloppy legal phrasing, aimed at appeasing both sides. It is unenforceable as written!

    • Posted November 13, 2012 at 7:15 am | Permalink

      *was not wads

    • neil344
      Posted November 13, 2012 at 10:56 pm | Permalink

      That is right. The “may” leaves it up to the discretion of the IRS, and they are not likely rock the boat when Congress controls their budget.

  9. Posted November 13, 2012 at 7:28 am | Permalink

    I was under the impression that the courts were looking into the charges. If not, they definitely should. The law seems to be clear.

  10. jay
    Posted November 13, 2012 at 7:54 am | Permalink

    I (of course) oppose tax exemption for religion. But, if you have it, this distinction on type of speech is going to remain unenforceable and largely meaningless.

    The distinction between candidate advocacy and issue advocacy is so nebulous: if you advocate a position, certain candidates obviously match that closer. Even if this were strictly enforced, all the members of the church know what is being said between the lines. It doesn’t really change election dynamics. Whether a church advocates ‘vote for Romney’ or ‘vote against abortion’, it is really a meaningless and arbitrary distinction.

    Regarding the above comment “Well, they’re not restricting their first amendment rights, they can say whatever the hell they want so long as they pay the price of admission.”, I suspect that they might win a 1A challenge. The constitution has no ‘price of admission’ regarding free speech.

  11. Marta
    Posted November 13, 2012 at 8:17 am | Permalink

    The IRS, probably one of the more unpopular government offices, is in a lose-lose position if it goes after churches which preach politics from the pulpit. There’s no conceivable way it can go after churches who mix their Jesus with politics, without being accused of conducting witch-hunts. The optics are terrible, and the IRS doesn’t gain much from the pursuit, beyond a black eye. Small wonder then, that the IRS leaves it alone.

  12. Sajanas
    Posted November 13, 2012 at 9:01 am | Permalink

    Part of me actually wants the churches to get into politics. To paraphrase Hank Hill from King of the Hill, they’re not making politics better, they’re just making Christianity worse.

    But to make them fully partisan, to make them organs of political parties is really a step to far for religion in this country. Rather than give their political candidates the aura of godliness, I think it just makes churches seem dirtier… particularly when they’re doing this to force their religious rules on everyone else because they can’t actually win the argument any other way. And I think that is at least part of the reason for the ‘rise of the nones’. Its a lot harder to make the case that these are higher institutions of the divine when they’re just interested in furthering the power of some joker.

    • jonny
      Posted November 14, 2012 at 3:54 am | Permalink

      This is an interesting PoV. They’ve certainly butchered the God v Gay debate so farcically, I can see value in giving them the rope to hang themselves.

      It’s a lot harder to make the case for Christian Compassion when they’re just interested in restricting the liberty of others.

      “Christians love their murder and rape,
      But those who have fun and hurt no one, they hate.”

  13. Posted November 13, 2012 at 10:01 am | Permalink

    I would definitely say it’s better to campaign directly for the removal of the tax exemptions. Otherwise you look like you’re against freedom of speech; that may not be true but people pattern-match. Both options are political suicide at the moment, but the big prize is actually easier to reach than the little prize.

  14. raven
    Posted November 13, 2012 at 10:08 am | Permalink

    This looks like a battle the USA, IRS, and US government has lost. Like marijuana or Prohibition.

    Legally the churches can’t endorse candidates and keep their tax exempt status.

    They did it anyway, en masse, virtually all of them fundies and the RCC bishops.

    The IRS could take away all their tax exemptions, something they have done before.

    In theory. In practice, they wouldn’t dare for political reasons.

  15. raven
    Posted November 13, 2012 at 10:14 am | Permalink

    This is another sign of the decline of US xinaity.

    It’s really (mostly) become right wing extremist politics, haters, and reality deniers with a few crosses stuck on it for show.

    They say they are in it to save your soul. But really it’s just a cover for the human drives for power, money, and sex.

    An old saying is that when you mix religion and politics, what you get is Politics.

  16. Posted November 13, 2012 at 11:08 am | Permalink

    A good friend of mine was an IRS lawyer for many years. Her fattest portfolio was Scientology. She is very smart and very hard-working but Scientology fought back with threats, lawsuits and advanced-state wriggling.
    Although Scientology is a cult far more sophisticated and ugly than many religious organizations who are also breaking our laws, my impression from my friend is that the IRS itself has been so depleted by Republican budgets and political attacks, it does not have the staff to pursue religious organizations in a vigorous way.
    And I believe the IRS depends to some extent on complaints from citizens like us. So I’d guess if a group offers such a complaint, with specifics and direct evidence to support it, the IRS would pursue an investigation.
    I’ve come to understand that most people, even very smart ones, don’t fully grasp how difficult and time-consuming is a federal agency investigation. Unlike us, who have emotional and intellectual causes of action, prosecuting agencies must have legal causes of action — and they involve direct, actual evidence.
    I didn’t intend to write that much, sorry.

    • raven
      Posted November 13, 2012 at 11:28 am | Permalink

      The IRS is so understaffed, they can’t possibly do much.

      Our whole tax system depends on people actually just paying their taxes.

      If people started not doing it en masse, the IRS couldn’t do anything about it.

      This is what happened in Greece, Argentina, and many third world countries. People just don’t bother to pay taxes and there isn’t enough enforcement to make them.

      • suwise3
        Posted November 13, 2012 at 11:43 am | Permalink

        The IRS can be bothered with going after the (powerful) churches. It does much better with people like my mother, who contributed $5 amounts to all sorts of charities all her life, and was audited by the IRS for seven years in a row. They do not go after people who can fight back.

        • Zugswang
          Posted November 13, 2012 at 1:00 pm | Permalink

          Unfortunately, the way the law is written, there are only a few individuals that can open up an audit against a religious organization. And since 1998, with the elimination of regional directors, the only person in the US with the legal authority to review a church’s tax-exempt status is the secretary of the treasury, and given how heavily politicized that position is (in addition to many other problems taking priority), I sincerely doubt he’ll authorize any church audits.

          When the town doesn’t have a sheriff, it doesn’t matter what the law says, because there’s no one there to enforce it.

          • suwise3
            Posted November 13, 2012 at 2:41 pm | Permalink
            • suwise3
              Posted November 13, 2012 at 2:42 pm | Permalink

              sorry, have no idea what a “permalink” is or how I created it. Used those greater/lesser than symbols…

  17. Posted November 13, 2012 at 12:09 pm | Permalink

    Personally, I think we need to move away from taxing huge swaths of economic activity with a number of carved-out exceptions for specific things we want to encourage and towards taxing only those things we want to discourage.

    Specifically, I think we should eliminate income, sales, and property taxes and instead tax pollution in all forms (but especially CO2) and the consumption of non-renewable resources.

    The one exception to that principle should be the estate tax, which should revert all of a person’s liquid assets to the government. The estate tax is essential to preventing the establishment of long-running dynasties, which inevitably lead to de-facto royal classes. It also strongly disincentivises killing people for the inheritance. If you want your beneficiaries to have that cash, give it to them before you die.

    b&

    • Gary W
      Posted November 13, 2012 at 2:06 pm | Permalink

      In general, we don’t want to discourage the consumption of non-renewable resources. It would make us poorer.

      • Posted November 13, 2012 at 2:12 pm | Permalink

        So, I take it your family burns the furniture in a bonfire in the living room to stay warm in the winter?

        You may think that that’s somehow saving you money on heating costs, but most adults realize the true idiocy of squandering irreplaceable wealth in such a short-sighted manner.

        Sadly, as a society, we are nowhere near so wise….

        b&

        • Gary W
          Posted November 13, 2012 at 2:31 pm | Permalink

          So, I take it your family burns the furniture in a bonfire in the living room to stay warm in the winter?

          You take incorrectly.

          As I said, in general we don’t want to discourage the consumption of non-renewable resources. It would make us poorer.

          • RWO
            Posted November 13, 2012 at 4:29 pm | Permalink

            Easter Island/Somalia/Haiti poorer?

            • Gary W
              Posted November 13, 2012 at 5:57 pm | Permalink

              If the consumption tax were high enough, yes. But we’re obviously not going to tax ourselves to Haiti-like levels of poverty.

              • RWO
                Posted November 13, 2012 at 8:04 pm | Permalink

                I am unable to figure out what you are saying.

  18. Doc C
    Posted November 13, 2012 at 1:20 pm | Permalink

    How about officials of tax exempt Universities making political endorsements or statements to their students, or to the public? Of course, you will say it is an issue of acting in official capacity vs as a private citizen. Isn’t that a distinction without a difference. Should we exclude the Academy from their tax exempt status as well?

  19. Pastor Fuzz
    Posted November 13, 2012 at 1:21 pm | Permalink

    In the article itself, and all the commentary upon it, I see no reference to the overt political campaigning that takes place in black churches.

    Maybe I scrolled down too fast and missed it. In any case, my point is that if some divines are violating the law by hustling in church for Romney, is it not equally true that others are violating the law on behalf of Obama? I suspect that the number of violations is great on both sides of the political divide.

  20. Dave
    Posted November 13, 2012 at 7:29 pm | Permalink

    What is truly disgusting and highly unethical is a situation like the one we had here in Minnesota. The RCC openly and aggressively campaigned in favor of the “marriage amendment” the one (of two on the ballot) that said marriage will be defined as the union of one man, one woman (in that order, apparently). The local archbishop in fact contributed ~$600k of church money to the cause. (I reported the RCC to the IRS and I have a nice “thanks, don’t bother us” letter to prove it.) So, we have the situation where a tax-exempt organization uses funds partially provided by the taxpayer – including the gay taxpayer – to campaign for a constitutional amendment discriminating against gays. And these are the people who claim the “moral high ground!” They are disgusting, every last one of them.

    • suwise3
      Posted November 13, 2012 at 9:21 pm | Permalink

      “They are disgusting, every last one of them.”

      Agreed.

  21. Posted November 14, 2012 at 5:21 am | Permalink

    The IRS did, in fact, once aggressively go after churches and revoke them for political activities. As recently as 2004 the IRS created a dedicated enforcement program focused on political activity by churches and other nonprofits.

    Called the Political Activities Compliance Initiative (PACI), it investigated in the 2004, 2006 and 2008 election cycles 80 instances where church officials were alleged to have endorsed a candidate during services.

    According to IRS tallies made public after each election, the majority of the PACI complaints were upheld and settled with a warning that the organization comply with the ban on political activity. One of the most famous case was in 1992 the IRS went after the Church at Pierce Creek in New York, which had bought full-page newspaper ads opposing then-Democratic presidential nominee Bill Clinton. The church lost it’s tax exemption.

    And then in 2009, their pursuits abruptly stopped. Why? The IRS is not saying. But what other big thing happened that same year? Obama got elected. Hum.

    Why is it so easy for most people here to see the connection between Republicans and churches, but miss the blatant politicizing of liberal churches and the Obama administration’s silent pass on this? Obama is not only ‘distressingly’ friendly to religion, he is playing it like a pro.

    • Marta
      Posted November 14, 2012 at 9:41 am | Permalink

      Obama, as a socialist Kenyan Muslim has quite enough problems as it is, without he should also be vilified by church-goers everywhere for IRS “persecution” of Jesus people.

      • Posted November 14, 2012 at 8:18 pm | Permalink

        but yet our two most religious presidents, George W. Bush and Bill Clinton, had no issue with the IRS ‘persecution’.


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