Televangelist Jerry Falwell has vehemently denied that any tax-exempt group affiliated with his ministry has ever run afoul of the federal tax regulation that bars houses of worship and other nonprofit groups from endorsing or working to elect politicians.
On July 2, Falwell appeared on CNBC's "Capital Report" along with Americans United Executive Director Barry W. Lynn to discuss the Bush campaign's efforts to enlist the help of "friendly congregations." Falwell accused Lynn and Americans United of trying to muzzle religious conservatives during this campaign season. Lynn noted that Falwell's Old Time Gospel Hour lost its tax exemption for 1986 and '87 after the IRS determined that the ministry was used for partisan political purposes.
"Never," Falwell shouted. "Never. Never. Not one minute. Not one second. You are wrong ... Never one second did we lose our tax exemption." He later added, "You are telling a lie right now, Barry."
Then on the July 16 broadcast of Fox News Network's "The Big Story With John Gibson," Falwell stated, "The fact is that 'Old Time Gospel Hour,' or any other ministry with which I've been associated has never lost its tax exemption." Americans United Assistant Communications Director Rob Boston had mentioned Falwell's record of using tax-exempt resources for partisan politicking.
In fact, in April 1993, both the Associated Press and The New York Times reported that Falwell's Old Time Gospel Hour had been investigated by the IRS and that a settlement agreement resulted in Falwell having to pay $50,000 in back taxes for the years 1986 and 1987 for engaging in political activity. That settlement also required Falwell to disseminate in the media a public statement signed by the pastor himself detailing the Old Time Gospel Hour's loss of tax exemption for those two years. Now that document has surfaced.
The May 1993 issue of The Exempt Organization Tax Review, a journal published by the nonprofit group Tax Analysts, published Falwell's Feb. 17, 1993 public statement in its entirety.
"Old Time Gospel Hour ("OTGH") today announced that the IRS has revoked its tax exempt status for 1986 and 1987 for improper political activities," a segment of the signed Falwell statement reads. "As condition of reinstatement of Federal tax-exempt status, OTGH said it agreed to pay $50,000 in tax for the two years and to change its organizational structure to ensure that no future political campaign intervention activities will occur."
In addition to the retroactive revocation of the Old Time Gospel Hour's tax exemption, the statement also notes that the Liberty Federation, another Falwell front group, had decided not to contest the revocation of its tax exemption in 1991. The IRS had determined that the group did not operate exclusively for religious and charitable purposes.
Apparently Falwell is having difficulty with the commandment against bearing false witness as well as the federal tax restriction on church-based electioneering.