The Taxman Cometh

In the 2006 election, 26 members of Congress lost their seats on Capitol Hill. Now, months after the last vote has been counted, nearly as many churches wait to hear whether they will lose their tax-exempt status for engaging in partisan political activity during the campaign.

Whenever the IRS receives an allegation that a church has violated the rules governing political participation, it is obligated to investigate. Complaints can be registered by private citizens or by advocacy groups, such as Americans United for Separation of Church and State, which leveled charges against four churches during the 2006 campaign. Churches can even tattle on each other, in theory.

A year ago, the IRS issued Fact Sheet 2006-17, which was intended to clarify the agency’s prohibitions of partisan intervention in elections by 501(c)(3) organizations, a category of nonprofits under which most churches fall. The very issuance of the clarification speaks to the ambiguity of the rules. While some details are clear, such as the rule against officially endorsing candidates, other aspects are subjective and vague. The overall prohibition of political intervention encompasses “any and all activities that favor or oppose one or more candidates for public office.”

To help churches understand what they may and may not do, the IRS Web site contains 20 hypothetical examples of political participation, some of which would be considered legal, some of which would not. The anecdotes are detailed, but a list of do’s and don’ts they’re not.

The discretion allowed to federal investigators under the rules is troubling. Citing several investigations from the 2004 election, the government watchdog group OMB Watch states that the IRS has a track record of “blurring the lines between partisan interference and legitimate issue advocacy.”

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Sojourners Magazine February 2007
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