Recently, an IRS official was quoted as saying that the IRS had suspended auditing churches.  Does this mean that the IRS has thrown up its hands and given up on enforcing the tax code against churches?  The answer is “no,” the IRS has not given up and the tax code still applies to churches.

The IRS official was Russell Renwicks with the Tax-Exempt and Government Entities division. He said that the IRS had received some complaints about potential violations of the tax code by churches this election cycle.  But he stated, “We are holding any potential church audits in abeyance.”  What did he mean by this?

Mr. Renwick’s statement stems from a 2009 court ruling involving the IRS’ regulations related to church audits.  These regulations began in 1984 when Congress passed the Church Audit Procedures Act (CAPA).  CAPA instituted several rules the IRS was required to follow when auditing any churches, and was passed to protect the constitutional rights of churches.

One of the requirements of CAPA is that an IRS official at the level of Regional Commissioner or above approve any church audits prior to the IRS contacting the church.  The IRS followed this requirement until 1998 when Congress reorganized the IRS.  After 1998, the IRS was no longer organized by regions of the country.  Instead, it became organized by the constituency it served.  So, until 1998, the IRS had regions like the Midwest region or the Northeast region.  After 1998, the IRS has divisions such as the small business division and the exempt organizations division.

One consequence of Congress reorganizing the IRS was that the position of Regional Commissioner no longer existed because there were no “regions” in need of a commissioner.  So the IRS designated the Director of Examinations in the Exempt Organizations division of the IRS to fulfill the requirement in CAPA previously fulfilled by the Regional Commissioners.

In 2009, a church in Minnesota was being audited by the IRS and challenged the audit.  The argument raised by the church was that the IRS was not complying with CAPA because it did not have a sufficiently high level official approving church audits.  A federal district court agreed and stopped the IRS’ audit of the church.

After this ruling, the IRS, to the best of our knowledge, shut down all of the church audits that it had ongoing, including one church audit handled by Alliance Defending Freedom.  The IRS stated that it was closing the church audit “because of a pending issue regarding the procedure used to initiate the inquiry.”  The “pending issue” was the Minnesota court’s ruling that the IRS was not in compliance with CAPA.

Since that time, the IRS has not been auditing any churches to the best of our knowledge.  It has proposed new regulations to designate a higher official in the ranks of the IRS to approve all church audits but it has never finalized those regulations.  No one really knows what the delay is, but we believe that the IRS will finalize its regulations at some point and will once again begin auditing churches.

In addition, the IRS still believes it has the authority to audit churches.  Its website discusses the requirements for instituting a church audit.  And that website was updated as late as November, 2012.

So when Mr. Renwicks said that the IRS was holding church audits in abeyance, he did not mean that the IRS was giving up and saying that it will never audit churches again.  All Mr. Renwicks said was that it was holding church audits in abeyance until it finalized its new regulations.  And we should remember that the IRS has the ability to go back in time and audit churches that it believes has violated the tax code during this time that it is not auditing churches.

And the IRS later came out and explicitly disavowed that Mr. Renwicks’ statement should be interpreted in a way to suggest that the IRS has given up on enforcing the tax code against churches.  The news story on this issue stated:

In response to queries from NBC News, the IRS disavowed comments by a regional official of its division overseeing tax-exempt organizations, who said last month that the agency was “holding any potential church audits in abeyance” while it revises its regulations in light of the 2009 ruling.

Dean Patterson, a spokesman for the IRS, said the official “misspoke,” adding: “The IRS continues to run a balanced program that follows up on potential non-compliance, while ensuring the appropriate oversight and review to determine that compliance activities are necessary and appropriate.”

The important point for churches to remember is that the IRS has not given up on enforcing the tax code against churches.  Churches must still be aware of the IRS regulations.  We have great resources on our website about those regulations to help churches understand their rights.

And we also must not give up on challenging the constitutionality of the Johnson Amendment and the IRS’ enforcement of that law.  Alliance Defending Freedom believes that the Johnson Amendment is unconstitutional and the IRS’ attempts to censor a pastor’s sermon from the pulpit violate the First Amendment.  For more information on this legal challenge, visit www.pulpitfreedom.org.

Alliance Defending Freedom stands ready to protect and defend the rights of churches, especially in relation to the IRS.  It is important that churches know and act on the right information in this critical area. If you have any specific question regarding what your church can do, please contact us and one of our attorneys will help.

Every year around this time, questions come up about churches being involved in political elections. Questions like, “Can my church talk about issues that are at stake in the election,” “can my church pass out voter guides,” or “what if a candidate wants to address my congregation?”

Admittedly, it can be confusing for churches and pastors to know what is allowed during an election season.  Much of this confusion stems from the vagueness of the tax code and the accompanying IRS regulations. To help, Alliance Defending Freedom has created many resources for you to utilize this election season.

Guidelines for Churches and Pastors

You’ll find a host of resources on www.speakupmovement.org/church that will clearly spell out what churches and pastors can and cannot do. One popular resource is the Guidelines for “Political Activities” by Churches and Pastors. These guidelines represent the current IRS law regarding what churches and pastors can do during elections. There is a helpful chart included that covers a broad range of topics, such as contributions to candidates and voter education.

Another helpful resource is the Guidelines for Distribution of Voter Guides by Churches. This resource outlines the requirements for distributing voter guides in your church. You will also find a helpful explanation for how to determine what voter guides are appropriate for distribution.

These resources should help you make sense of the law and regulations surrounding elections. However, if you still have questions, please contact us directly. Our goal at Alliance Defending Freedom is to ensure that no church is silent during this election season simply because they don’t fully understand what they can do or are intimidated by misinformation.

Pulpit Freedom Sunday

Pulpit Freedom Sunday is all about ensuring that pastors determine what is said from their pulpits, and not the IRS or groups like Americans United for Separation of Church and State. The goal of Pulpit Freedom Sunday is to have the Johnson Amendment declared unconstitutional.  The Johnson Amendment (the last sentence of section 501(c)(3) of the tax code) has proven to be a weapon of censorship and intimidation of churches during election seasons.  In fact, groups like Americans United for Separation of Church and State frequently send letters to pastors trying to intimidate them into silence on the biblical issues surrounding elections. But we believe pastors and church leadership should determine what’s said from the pulpit, not the government or other organizations outside of the church.

On Pulpit Freedom Sunday, October 7, 2012, hundreds of pastors will stand together and preach a sermon that evaluates the candidates running for office in light of Scripture and Church doctrine.  Please go to www.pulpitfreedom.org and sign up to join this growing movement of bold pastors. If you are a pastor and you cannot participate on October 7, then pick a Sunday as close to that date as you can, but before the election. You can still sign up to participate and make your voice heard. Pulpit freedom is vital and this project is an important means of ensuring that much of the confusion and intimidation confronting churches during elections is removed.

It is our hope that these resources, and the many others you’ll find on www.speakupmovement.org/church, will help you as a pastor fulfill your biblical calling to “preach the word; be ready in season and out of season; reprove, rebuke, and exhort, with complete patience and teaching.” (2 Tim. 4:2). This calling extends even during election cycles, as biblical Truth does not take a holiday during a political campaign. Now, more than ever, the voice of America’s churches must be heard.

Americans United for Separation of Church and State recently announced that it sent over 60,000 letters to churches across the country, warning them from becoming involved in “partisan politicking” during this election season.  The letter tries to intimidate churches by ominously warning “If the IRS determines that your house of worship has engaged in unlawful intervention, it can revoke the institution’s tax-exempt status or levy significant fines on the house of worship or its leaders.”

Letters like this are a favorite tactic of AU.  For years now, it has attempted to intimidate churches into silence during election season.  But here’s the problem.  AU is using an unconstitutional law to try and intimidate and scare churches.

The Johnson Amendment, upon which AU bases its letter, is blatantly unconstitutional.  Under the First Amendment, the pastor has the right to determine what is said from the pulpit, not the IRS.

It’s ironic that an organization committed to the “separation of church and state” is arguing for more governmental monitoring and control of churches and pastors.  AU wants the IRS to monitor a pastor’s sermon, and to censor that pastor if the IRS agent happens to think that the pastor crosses the line.  This is especially problematic because the line of what is prohibited under the Johnson Amendment is very fuzzy.  That makes it convenient for AU to argue that churches have crossed the line when in fact they have not.

It’s time to remove the Johnson Amendment from the hands of AU.  It has been used as a weapon of intimidation against churches for far too long.  That’s why Pulpit Freedom Sunday is so important.  Because the whole goal of Pulpit Freedom Sunday is to protect the sanctity of the pulpit and to prevent the IRS, or radical groups like AU, from intimidating churches.  If you are a pastor, go to www.pulpitfreedom.org and sign up to participate in Pulpit Freedom Sunday on October 7.

Read Alliance Defending Freedom’s response letter to the AU letter.

The IRS warned pastors attending a faith leader’s summit in Washington D.C. recently not to speak from their pulpits about candidates or elections.  As reported by OneNewsNow, IRS official Peter Lorenzetti attended the summit and told pastors that prohibited activities include anything that supports or opposes a candidate for public office.  Mr. Lorenzetti’s statements are not surprising or even noteworthy given the fact that IRS officials have been interpreting the Johnson Amendment in this way since its addition to the tax code in 1954.  So why should we be concerned about these statements?

Well, for starters, Mr. Lorenzetti’s statements follow a long pattern by the IRS of intimidating pastors and churches into silence on the issues surrounding candidates and elections.  The Johnson Amendment operates as a direct restriction on the speech of pastors and churches.  There is no denying this fact.  And there is no denying the fact that the Johnson Amendment is unconstitutional.  It is never permissible to allow a government agency the power to punish a church for something its pastor says from the pulpit.  Where did America’s churches ever get the idea that it was okay to invite IRS officials into the process of sermon preparation and allow them to wield the power of censorship over what your pastor says from the pulpit?  Such a regime is not okay, and indeed, it is unconstitutional.

That’s why ADF started Pulpit Freedom Sunday in 2008 – to restore a pastor’s right to speak freely from the pulpit and to remove the pen of censorship from the hand of government officials.  Because we believe that the Constitution protects the right of a pastor to speak freely from the pulpit and that government should hold no sway over a pastor’s sermon preparation or delivery.  It is for every pastor and church to decide for themselves what is said from their own pulpit.

Pulpit Freedom Sunday is October 7, 2012.  If you are a pastor, please sign up to participate to exercise your constitutional rights on that day together with hundreds of other pastors  from across the country.  If the IRS wants to continue to enforce the Johnson Amendment against pastors and churches, then it will continue to take a sustained and united effort to remind the IRS of the constitutional rights of pastors and churches.  If you are not a pastor, please send every pastor you know to www.pulpitfreedom.org to learn more and to sign up to participate on October 7, 2012.

When it comes to college basketball, Lexington, Kentucky is “Title Town USA.”   With its precision offense and shot-blocking defense, the home-town University of Kentucky Wildcats won another NCAA national championship a few weeks ago.

But away from the basketball court, some folks in Lexington refuse to acknowledge that religious freedom ranks No. 1 in the Bill of Rights.

Some folks like the local Gay & Lesbian Services Organization (GLSO).  If they get their way, religious freedom will be dealt a huge defeat like those served on so many of the Wildcats’ basketball opponents.

Alleging “discrimination,” GLSO is demanding the Lexington-Fayette Urban County Human Rights Commission slap a technical foul on the Christian-owned business Hands On Originals.

Blaine Adamson, co-owner of Hands On Originals shirt shop, declined GLSO’s request to print t-shirts for a “pride” parade celebrating homosexual behavior.  The co-owners of Hands On Originals sincerely believe in the inspired Word of God, and they strive to live by its commands in their personal and public lives.  They disagree with the message served by these “pride” parades, and they exercised their right to be obedient to God.

In retaliation, GLSO is urging large customers of Hands On Originals – including the University of Kentucky – to boycott the shirt shop, which could be forced to lay off employees if business revenue drops substantially.

Blaine Adamson joins a growing list of Christian business owners facing legal attack in the clash between the free exercise of religion – the first liberty affirmed in the U.S. Constitution – and the homosexual legal agenda.  The Alliance Defense Fund (ADF) and our allies have successfully defended many of them, but other costly legal battles rage on.  In New Mexico, Elaine Huguenin awaits appeal of a similar “discrimination” charge – for declining to photograph a same-sex “commitment ceremony.”  If convicted, she may have to close her photography business.

This issue brings two vitally important questions into play for believers.  How should the Body of Christ respond to these predatory assaults on religious liberty?  And, are pastors free to scripturally equip their congregations on how to respond to attacks on religious freedom?

It’s crucial for Christians to understand the serious legal risks they face in the public square as they strive to uphold their biblical beliefs.  Pastors also need to understand the attacks against their congregants and how to lead in a time of hostility toward religious freedom.

Pastors can take an important step in leadership by participating in the ADF Pulpit Freedom Sunday October 7^th when hundreds of pastors will preach the full counsel of scripture on the issue of candidates and the election to equip their congregations and to counter a challenge to their own free speech.

They do so knowing Americans United for Separation of Church and State (AU) will bluster and complain.  This radical group is threatening pastors with intimidating letters warning them to refrain from speaking on some of the moral issues which will help their congregations.

This bullying has been happening since Congress hastily approved the “Johnson Amendment” in 1954.  The act modified the Internal Revenue Service tax code and overturned 178 years of free speech for America’s pastors, who now risk loss of tax exemptions for applying scripture or church teaching to the issue of candidates and elections.

For instance, if Blaine Adamson’s pastor urges the congregation to vote for political candidates who will uphold religious liberty, AU will file a “complaint” (really just a tattle-tale letter) with the Internal Revenue Service demanding the church lose its tax exemption.

The Alliance Defense Fund and our allies are protecting churches willing to courageously challenge this unjust tax law.  While we’re not encouraging pastors to become political commentators, we are urging them to determine the content of sermons on their own.  For too long, pastors self-censored their messages and essentially enabled the IRS to determine what can and can’t be said in the pulpits of America.

Pulpit Freedom Sunday pastors are forwarding recordings of their sermons to the IRS in hopes of drawing investigations.  When IRS officials attempt to whistle a church for a flagrant foul, ADF will sue the IRS in an attempt to overturn the Johnson Amendment.  Our goal is to regain complete freedom for America’s churches.

Please pray for victory in the battles for religious freedom in Lexington, in New Mexico, and across America.  Pray for free speech for our pastors