8/05/2006

Churches Being Intimidated by IRS?
Veiled media warnings carry appearance that some want churches silent on election issues

BY BOB ELLIS
DAKOTA VOICE

With the election season heating up and the ongoing battle over abortion and homosexual "marriage," rumors, myths and accusations are beginning to fly from a number of corners in South Dakota, especially with regard to what Christians in general and churches in specific can and cannot do politically.

Churches, by their very nature, exist, among other things, to make a statement on what is right and what is wrong. Labeling some issues as "political" does nothing to negate the church's obligation to sound teaching and to act as the conscious of society. Yet as our tax structure currently exists, there are certain things churches and ministries are not permitted to do if they want to retain their tax exempt status.

The current prohibition against certain "political" activities by non-profit organizations stems from legislation championed by Senator Lyndon B. Johnson in 1954. During his reelection campaign to the U.S. Senate, Johnson was being opposed by some tax exempt organizations. Johnson forwarded this legislation as a way to rein in what some saw as improper activity by nonprofits. Johnson was not targeting churches, but they were included in the legislation by default as tax exempt organizations. Before this, there had been no question of taxing churches for any reason. The Johnson legislation was subsequently passed by congress.

Efforts are under way in congress to do away with this muzzle on churches. Since at least 2002, bills have been put forth to reverse part of the 1954 legislation pertaining to churches, the latest attempt in 2005 going under the name " Free Speech Restoration Act."

Because of misunderstandings about laws governing the activities of non-profit organizations, and misunderstandings about the so-called "separation of church and state," it is important that churches and other Christian tax-exempt organizations understand what they can and cannot do without risking their tax-exempt status.

According to an IRS press release issued Feb. 17, 2006, tax exempt organizations are 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." No mention is made of any prohibition against churches educating their people about the morality of issues which also happen to be in the public square.

In fact, the same press releases says that tax exempt organizations are "permitted to conduct certain voter education activities (including the presentation of public forums and the publication of voter education guides) if they are carried out in a non-partisan manner" and "may encourage people to participate in the electoral process through voter registration and get-out-the-vote drives."

John Adams, one of the founders of the United States, affirmed the duty of churches to address right and wrong in the public square, stating in 1754, "It is the duty of the clergy to accommodate their discourses to the times, to preach against such sins as are most prevalent and recommend such virtues as are most wanted."

Adams even went so far as to say that pastors should discuss the duties of political figures, a proposition which would cause many to shudder today: "If the rights and duties of Christian magistrates and subjects are disputed, should they not explain them, show their nature, ends, limitations, and restrictions?"

Regarding issues, the IRS says tax exempt organizations "may take positions on public policy issues, including issues that divide candidates in an election for public office" as long as candidates are not favored or opposed. Tax exempt organizations are prohibited, however, from spending a "substantial part" of their activities on lobbying for legislation. "Substantial part" is not clearly defined by the IRS, but is based on "all the pertinent facts and circumstances" including "time devoted (by both compensated and volunteer workers) and the expenditures devoted by the organization to the activity." The financial limit is based on the size of the organization and may not exceed $1 million.

"The churches have the duty to speak without ambiguity about the covenant of marriage and why redefining that to allow men to marry men would be wrong," Robert Regier, executive Director of the South Dakota Family Policy Council said recently. “The churches have a duty to speak about the sanctity of life. They should talk about those issues, and they should have the freedom to preach on whatever they want."

Regier says the Alliance Defense Fund (ADF) is offering to assist and defend any South Dakota pastor who takes a stand on the election issues of abortion, homosexual "marriage" and video lottery, including efforts to inform their members about where candidates stand on those issues. The ADF was formed in 1994 by the late Dr. Bill Bright, the late Larry Burkett, Dr. James Dobson, Dr. D. James Kennedy, and the late Marlin Maddoux for the legal defense and advocacy of religious freedom. The ADF has led or assisted several U.S. Supreme Court victories for religious liberty.

Several South Dakota churches have already participated in voter registration drives and distributed South Dakota Family Policy Council voter guides for the June primary. This activity is completely within that allowed for tax exempt organizations.

While pastors face some restrictions in what they may say or do in their official capacity, they do not give up their right to free expression as individuals. The IRS press release says, "To avoid potential attribution of their comments outside of organization functions and publications, organization 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."

The IRS released a report in Feb. 2006 on the 2004 political cycle, citing a relatively small number of allegations of improper activity. The prohibited activity included printed material encouraging members to vote for a particular candidate, religious leaders using the pulpit to endorse or oppose a particular candidate, organizations placing signs on their property endorsing a candidate, churches giving preferential treatment to a candidate by allowing them to speak at a church function, and churches making cash contributions to candidates.

The release states that there are more than 1 million tax exempt organizations in the United States. The report stated that of 82 examinations, most concerned one-time, isolated occurrences of prohibited political activity, and the only punitive action was a written advisory from the IRS. No churches had their tax exempt status revoked.

Tax exempt organizations seeking more information on this subject may want to read the IRS Tax Guide for Churches and Religious Organizations at http://www.irs.gov/pub/irs-pdf/p1828.pdf. This document includes extensive information and examples of various scenarios involving political activity.