The IRS, the Tax Code and Partisanship Investigation

According to a recent article from the Associated Press, the Internal Revenue Service has not been adequately investigating allegations of partisan activity. The article states that this failure to investigate has allowed religious entities to either endorse candidates with unabashed directness or with thinly veiled statements.

Conflicting reports as to the validity of this claim have emerged from Internal Revenue Service. Russell Renwicks, a manager in the IRS Mid-Atlantic region, state that the IRS had suspended audits of churches that had fallen under suspicion for engaging in political activity that would be contrary to federal regulations. On the other hand, an IRS spokesperson in Washington, Dean Patterson, stated that Mr. Renwicks “misspoke.” Although he would not provide any specific details, he did say that the IRS continues to investigate allegations of noncompliance in a balanced manner.

This issue has garnered the attention of tax attorneys who specialize in tax law as it relates to religious groups, as well as advocate groups who monitor any and all cases that come through. They agree that there have been no inquiries into allegations of partisan activities by religious organizations for the past three years. According to legal scholars, this lack of inquiry has led to an emboldening of those who would cross the line.

This issue, with its implications on both sides of the debate between church and state, has many who closely watch any developments.

Two competing organizations, Americans United for Freedom of Church and State and the Alliance Defending Freedom, are two organizations that are paying particular attention to cases and potential cases. Americans United for Freedom of Church and State, an organization devoted to a strict division between church and state, gathers evidence it hopes the Internal Revenue Service can use in investigations of entities it believes are crossing the church-state line. When they are made aware of Americans United efforts to gather evidence, Alliance Defending Freedom will then jump in to defend the entity. Since the 2009 federal ruling that required the IRS to clarify which officials are authorized to conduct audits over the tax code’s political rules though, neither side has heard of any IRS investigations into allegations of church-state impropriety.

Tax lawyers from across the country from various scholarly institutions and tax law firms agree that no news of the IRS inquiring into such cases has come across their desks. These tax attorneys and tax law experts, who specialize in tax-exempt law, have always been keenly aware of the involvement or the lack of involvement of the IRS in church-state cases.

Marcus Owens, a Washington attorney who worked for the IRS until 2000, remarked that the IRS was known to initiate around 30 cases a year in regards to religious organizations and alleged partisan activity. That number has drastically fallen, with only two recent cases regarding religious organizations. In these cases though, partisanship activity was not the issue at hand.

While the tax code does allow a broad range of political activity, including commentary on social matters and encouraging civic participation, it does not allow for churches to endorse a candidate or to become a partisan advocate. This recent election has seen a controversial number of statements that critics allege fall under the categories of endorsement prohibited under the tax code.

With the political atmosphere increasingly divisive, tax attorneys predict that there is an extreme uneasiness for IRS that accompanies allegations of partisan misconduct. Some churches are perhaps wary of strict oversight of an IRS agent in the congregation placed for scrutiny, and, according to many tax law experts, the IRS agent doesn’t want to be there, either.


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