Bay Area Estate And Tax Planning Law Firm

Churches need not fear an IRS audit because they are nonexistent

On Behalf of | Nov 23, 2012 | Uncategorized |

True or false: nothing is certain in life other than death and taxes. Apparently the answer may be false for churches, synagogues and other religious institutions in San Francisco and across America. It may be false because the Internal Revenue Service has not been auditing religious institutions since 2009.

There is a tax code which restricts religious institutions from making political endorsements, or risk losing their nonprofit status. And while IRS audits are common for other nonprofits where the IRS examines everything from salaries to spending, the churches have been exempt from the same scrutiny. Officially, according to an IRS spokesperson, “the IRS continues to run a balanced program that follows up on potential noncompliance.” The facts say otherwise.

  • Two groups, one on the political right and one on the political left, have yet to find an example of a church audit since 2009.
  • Evangelist Billy Graham met with candidate Romney and ran a full-page ad in major newspapers.
  • A Pew survey revealed that 40 percent of black Protestant clergy endorsed candidate Obama in church services.
  • A Roman Catholic Bishop in Illinois ordered the priests in his diocese to read a statement warning that supporting pro-choice policies is the same as rejecting “Jesus as their Lord.”
  • A Texas pastor posted a sign at the church which read, “Vote for the Mormon, not the Muslim.”
  • Since 2008 1,500 pastors endorsed a candidate from the pulpit, and sent a videotape or other record of the endorsement to the IRS. Despite the efforts of “Pulpit Freedom Sunday” the IRS has never contacted a pastor involved in these endorsement efforts.

The efforts are on both the right and the left of the aisle, and the IRS is ignoring both of them. In 2009 a federal court ruled that the IRS needed to identify the high-ranking official in charge of authorizing audits over the tax code’s political rules. No individual or office has been identified and so the audits remain nonexistent.

Should a church become the target of an IRS audit, professional and experienced legal representation would be critical. It seems that religious institutions may be seeking to set a precedent.

Source: Associated Press, “IRS not enforcing partisan rules,” Rachel Zoll, Nov. 12, 2012

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