The Internal Revue Service indicated earlier this year that it has the proper mechanism in place to investigate houses of worship that break the law by engaging in partisan politicking. But recent comments by the tax agency’s top official indicate there’s still some confusion about this issue.
Regular readers of this blog know that Americans United has long pressured the IRS to investigate houses of worship that blatantly defy the tax code’s prohibition against campaign intervention. We’ve had to persist on this issue because the IRS suffered a major court defeat in 2008 that put a halt to the entire church auditing process, then the agency spent years dragging its feet in response.
(A little background: In 1998, the IRS reorganized and some positions were eliminated. One of those positions was the bureaucrat who was charged with initiating church audits. The IRS failed to select a suitable replacement, and in 2008 a federal court said the IRS could not audit anymore houses of worship until they found the right person to oversee those investigations. For some reason, the IRS seemed unable to resolve this issue for several years.)
Finally, a glimmer of hope emerged this year. As part of a lawsuit (since withdrawn) filed by the Wisconsin-based Freedom From Religion Foundation, the IRS shared a letter sent to officials at the U.S. Department of Justice dated June 27, 2014. The missive states that the IRS “has processed several cases involving churches using procedures designed to ensure that the protections afforded to churches by the Church Audit Procedures Act are adhered to in all enforcement interaction between the IRS and churches.”
The IRS also said it had established a “Political Activities Referral Committee” (PARC) to investigate allegations made against houses of worship. PARC is up and running and has determined “as of June 23, 2014, 99 churches merit a high priority examination” for partisan political activity undertaken during the years 2010-13.
This all sounded promising – until IRS Commissioner John Koskinen made comments last month that cast doubt on the IRS’ preparedness in this area. In an interview with Tax Analysts, a tax policy trade publication geared toward tax attorneys and lawmakers (for which I used to work), Koskinen said he was unsure which IRS official had been appointed to decide whether or not a church should be investigated for unlawful partisan activity.
“I can’t tell you who that person is at this point because I actually don’t know,” he said.
We could give Koskinen the benefit of the doubt on this one and believe that the IRS has appointed someone to oversee church audits – and he simply doesn’t know that individual’s name. But Koskinen made additional remarks that cast doubt on that hopeful hypothesis. When asked about the status of the regulations that outline church audits, which had to be updated following that 2008 court decision, he said:
“I’m pushing to get them out. We don’t control the process totally. As I said earlier, we work with [the] Treasury [Department] and those regulations ultimately come out under -- they are viewed as IRS regulations because we administer them, but the policy decisions behind the regulations are the responsibility of Treasury.
“We meet every two weeks,” he continued, “a group of us, who are reviewing that, and it’s one that is under review and that we are trying to get out. It’s been pending for a while. My goal in life is to not have issues lie fallow for too long.”
Koskinen added that the church audit procedure is among the “more difficult and complicated” procedures that the IRS must revise.
It seems Koskinen ultimately raised more questions than he answered. The IRS letter to the Justice Department made it appear that the IRS at least had the necessary ducks in the necessary row to investigate churches for politicking. Koskinen, however, couldn’t say which official is now in charge of the audit process and he admitted that the updated regulations concerning that process are not complete.
It has become increasingly clear that the IRS is probably not telling the full story when it comes to policing partisan political activity by houses of worship. Americans United has tried to prod the IRS to take charge, but years of inactivity resulted in Religious Right ploys like Ralph Reed’s Faith & Freedom Coalition distributing 20 million voter guides in 117,000 churches this year. Those “guides” were clearly designed to promote GOP candidates.
This has to stop. The IRS needs to get its act together and start enforcing the law now.