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Oct 22 2012

IRS ‘temporarily’ suspends audits of churches

Recall my post on Pulpit Freedom Sunday when some churches openly challenged the IRS to revoke their tax-exempt status by explicitly endorsing candidates.

The question I asked was why the IRS had not taken any action yet, even though the churches had been doing this since 2008. Commenter flex explained that Congress had written some weird rules that hamstrung the IRS in knowing when they could investigate possible violations of 501(c)(3) restrictions by churches.

I now learn that the IRS has “temporarily suspended tax audits of churches pending final adoption of IRS rule changes to clarify which high level Treasury official has authority to make a determination under IRC Sec. 7611 that there are reasonable grounds to begin a church tax inquiry.” Apparently the IRS has been bombarded with complaints on their seeming inaction on this issue but could not do anything even in the most egregious of cases.

It is not clear when the proposed rule changes will go into effect.

5 comments

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  1. 1
    Stevarious, Public Health Problem

    It is not clear when the proposed rule changes will go into effect.

    My guess? Not soon.

    In fact, my prediction is that this sad state of affairs will go on so long, and violations of this rule will become SO prevalent, that when someone finally does start cracking down on it, cries of ‘persecution’ will shake the skies as the IRS starts ‘picking on’ just a few of the violators (because only a tiny percentage of the violators will have enough evidence against them to qualify under the bizarre rules that have been put in place.)

    I also predict that this will turn out to have been the plan all along as part of a concerted effort to shift the status quo.

  2. 2
    flex

    Stevarious, Public Health Problem wrote,

    … when someone finally does start cracking down on it, cries of ‘persecution’ will shake the skies as the IRS starts ‘picking on’ just a few of the violators….

    And the IRS will take the lion’s share of opprobrium rather than congress which deserves it for ham-stringing the IRS in the first place.

  3. 3
    gworroll

    Just abolish the exemption entirely.

    For this exemption to exist, either there have to be no standards whatsoever for a group to qualify as a church… or someone in the government has to decide what is and is not a religion.

    This gets uncomfortably close to the establishment clause for me. It doesn’t explicitly favor a specific religion, true, but still… someone has to make that call. For people not of their own faith position. And the former option basically makes a mockery of the entire tax code.

    If a church has other grounds on which to apply for non profit tax exempt status, fine. But religious status or lack thereof should not be considered.

  4. 4
    Corvus illustris

    FIFY:

    “Apparently the IRS has been bombarded with complaints on their seeming inaction on this issue but could not do anything even in the most egregious of cases until after the elections.”

  5. 5
    JagerBaBomb

    Pretty much–though, whoever wins, I doubt we’ll see much action on their part. This is an issue that no president (or candidate) wants to get involved in.

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