Paul L. Caron
Dean





Sunday, June 12, 2016

The IRS Scandal, Day 1130

IRS ChurchThe Surly Subgroup:  Tying the IRS’s Hands. Even Tighter, by Sam Brunson (Loyola-Chicago):

Yesterday, the House Committee on Appropriations reported H.R. 2995 to the House of Representatives. H.R. 2995, the Financial Services and General Government Oversight Appropriations Bill  for FY 2017, if passed, would continue the trend of reducing the IRS’s budget, this time by $236 million. ...

I’m interested in an amendment added yesterday by Rep. John Culberson (R-TX). Section 135 of the bill would make it even harder than it already is for the IRS to audit churches. 

The IRS already faces significant limitations on its ability to audit churches. ... The result? Churches are rarely audited, and even more rarely lose their exemptions. While the IRS doesn’t disclose the number of church audits it performs, the ECFA suggests that there may be 100 church audits a year. And how many churches are there in the U.S.? Again, hard to say, but the U.S. Religion Census finds about 345,000 congregations in the U.S. That would be a 0.03% audit rate; even assuming the number of churches is off by a factor of 10, we’re talking a 0.3% audit rate. And I can only find one report of a church losing its exemption for violating the campaigning prohibition (even though thousands of churches have deliberately and explicitly violated it).

That, though, is apparently insufficient for Rep. Culberson, who claims he added his amendment to “protect churches from being bullied by the Internal Revenue Service (IRS) and left-wing activists whenever a church engages in educational political activity.”

https://taxprof.typepad.com/taxprof_blog/2016/06/the-irs-scandal-day-1130.html

IRS News, IRS Scandal, Tax | Permalink

Comments

Section 135 is pretty short and basically transparent. The IRS Commissioner must *personally* approve any decision to deny tax exemption to a church for political activity reasons, and s/he must inform Congress before the decision takes effect. The amendment makes no mention of Section 4958 intermediate sanctions penalties being affected. If the author is correct and revocation has happened only once, it sounds like the amendment is a political statement rather than a substantive change in practice.

Posted by: Michael Wyland | Jun 13, 2016 5:20:40 AM

Churches tend to get audited when they say something from the pulpit that politicians view as political. Now that everything is political it makes sense that Churches may require more protection.

Posted by: James | Jun 12, 2016 3:17:48 PM

That author comes off like they want all the churches audited every year. Well, he would probably grant an exemption for churches that support the Democrat party, so we shouldn't be too hard on him...

Posted by: Wodun | Jun 12, 2016 11:39:32 AM