The Internal Revenue Service has hit a rough patch lately.
The agency, never anyone’s favorite to begin with, has been slammed by congressional conservatives who have cut funding and made it difficult for the IRS to reach full staffing levels.
A few years ago, reports circulated that the IRS had unfairly targeted Tea Party groups for heightened scrutiny. As it turned out, there was less to the story than was reported, but the matter exploded and one top official, Lois Lerner, was forced to step down.
This may explain in part why the IRS has been lax on enforcing the federal law that bars tax-exempt, non-profit organizations that hold 501(c)(3) status from intervening in partisan politics by endorsing or opposing candidates for public office.
Clearly the IRS is feeling beleaguered. But it is time for the agency to start rebuilding. Part of that effort should include a focus on enforcing all of the nation’s laws that affect non-profit groups – including the “no politicking” rule.
Tax exemption comes in many forms, but one of its most common manifestations is the (c)(3) status. This classification includes houses of worship, but it also encompasses a host of secular organizations. (Americans United holds this tax status.)
501(c)(3) organizations are not supposed to be explicitly political. They may lobby, within certain limits, and they may speak out on political issues, including ballot referenda. They are not permitted to endorse or oppose candidates, donate money to political hopefuls or distribute campaign material.
Religious Right organizations, primarily Alliance Defending Freedom (ADF), complain that this restriction is a violation of free speech. ADF and its allies overlook the fact that tax exemption, which is a very lucrative benefit, comes with conditions. The restriction on partisan politicking is hardly the only one. These rules are a type of oversight that ensure that tax exemption is not abused or is granted to groups that don’t deserve it.
No organization is forced to accept tax exemption. Religious groups that wish to engage in partisan politics and endorse or oppose candidates could give it up. But they never seem to want to do that. They want all of the benefits of tax exemption, which are considerable, without abiding by the conditions. That’s simply not fair.
Proponents of church politicking also assert that the restriction dates only to the 1950s and point to its origins as an amendment sponsored by Lyndon Johnson when he was a U.S. senator.
Johnson was apparently concerned about tax-exempt groups that were attempting to influence the outcome of congressional races – perhaps even his own. He probably believed their partisan activity should disqualify them from that status. There was little or no debate over Johnson’s amendment, a sign that it was not seen as controversial at the time.
Much has changed since the 1950s. The rise of powerful political action committees (PACs) has profoundly affected the course of American politics. PACs are explicitly political entities. They exist to get someone elected (and someone else not elected) to public office. They are not tax exempt.
Many Americans are concerned about the influence of PACs and believe there is little meaningful oversight on them as it is. Imagine how much worse the situation would be if wholly tax-exempt entities, such as religious ministries, were suddenly permitted to jump head first into partisan politics. Many candidates would likely form sham non-profits to launder campaign funds without paying a dime in taxes or submitting to any form of even minimal oversight.
It is time for the IRS to take this issue more seriously. In the early 1990s, the agency took some tentative steps in the direction of enforcing the law. A New York church that had taken the audacious step of placing a newspaper ad advising people not to vote for Bill Clinton for president lost its tax-exempt status, an action later upheld by a unanimous federal appeals court.
For various reasons, little has happened since then. The IRS continues to insist that it has an enforcement mechanism in place, but there is no evidence that it is being used.
As the election season heats up, that enforcement mechanism should be used, and it should be employed even-handedly. The rise of real estate mogul and reality TV star Donald Trump has alarmed some progressive religious leaders and pleased some conservative ones. These pastors are free to oppose or support Trump as private citizens; they may not use the resources of their houses of worship to elect or defeat him.
Polls show that most Americans oppose politicized houses of worship. Most clergy respect the “no-politicking” rule and follow it. There are some, however, who seem to believe that handing down lists of political endorsements is part of their job description.
It isn’t. And it’s past time for the IRS to make that clear.