In a letter sent today to IRS Acting Commissioner Daniel Werfel, Americans United noted that the IRS recently announced proposed tightened rules governing 501(c)(4) organizations. While this is a complex area of tax law, the question of church-based electioneering requires a much simpler fix.
“The law says houses of worship that choose to engage in politics are risking their tax exemption,” said Americans United Executive Director the Rev. Barry W. Lynn. “But that law is meaningless if the IRS fails to enforce it. Without some teeth, the regulation might as well not exist.”
Houses of worship are tax exempt as 501(c)(3) organizations. Under federal law, groups holding the (c)(3) status are strictly prohibited from intervening in elections; they may not advise congregants or members to vote for or against specific candidates.
The IRS, however, has done little to enforce the law. Part of the problem stems from a 2008 federal court ruling involving a Minnesota church that successfully challenged the IRS’s procedures for investigating churches.
In U.S. v. Living Word Christian Center, a court said the IRS could not audit the church because it had not designated the proper IRS official for initiating such an audit. The IRS subsequently announced that it would issue new rules to deal with the problem, but more than five years later, little has been done.
In 2009 the IRS issued a proposal to update its church audit procedures in accordance with the court ruling, but it never released a final set of rules. Since then, experts believe no churches have been investigated for improper campaign intervention despite numerous reported violations.
In today’s letter to Werfel, AU’s Lynn noted that the tax agency is revamping rules for political activity by 501(c)(4) “social welfare” groups, a task most observers believe will be controversial and complicated. By contrast, clarifying audit procedures for churches requires a simple fix of adding a few sentences to existing IRS regulations.
Lynn urged that the final rule be adopted and that enforcement begin.
“My purpose in writing today is to request that the IRS finalize these regulations, publicize them and begin enforcing the law,” wrote Lynn. “As you know, our nation is approaching mid-term elections; I believe it would be detrimental for our country and the democratic process to go through another election cycle with the ‘no-politicking’ rule unenforced. The more the IRS delays, the more some pastors conclude that they do not have to abide by this law.”
Americans United pointed out in its letter that it has sent 124 complaints to the IRS about church politicking since 1992, but to AU’s knowledge just one of those churches lost its tax-exempt status. As a result, Religious Right groups have been encouraging pastors to dive head first into partisan politics – with little fear of consequences.
“We’ve done our part by telling the IRS when churches defy federal law,” Lynn said. “Now it’s time for the IRS to act on our complaints.”
Americans United is a religious liberty watchdog group based in Washington, D.C. Founded in 1947, the organization educates Americans about the importance of church-state separation in safeguarding religious freedom.