In 2013, the Internal Revenue service fell into scandal when the public learned it was targeting Tea Party groups and other political opponents of the Obama administration.
In 2015, there's a new scandal brewing: The IRS may be taking aim at churches—under the prodding of one of the nation's most radical atheist groups, the Freedom From Religion Foundation (FFRF).
The Madison, Wisc.-based group may be known best for its in-your-face stunts, like posting billboards across the country at Christmas and Easter proclaiming "Jesus Christ is a myth." But the lion's share of its work takes place in the legal sphere. FFRF aggressively seeks to suppress various public expressions of faith, cut off government funds to faith-based charities and harass churches in myriad ways—from trying to eliminate pastors' housing-allowance tax deductions to demanding that churches jump through legal hoops to remain tax-exempt.
Shortly after the 2012 elections, FFRF sued the IRS for failing to crack down on churches suspected of "illegal electioneering"—taking public stands on political candidates and issues. Instead of resisting the lawsuit, the agency reached a friendly settlement with the atheists—who came away happy with the result.
On June 27, 2014, Mary Epps, the agency's acting director of Exempt Organization Examinations, turned a list of 99 churches over to the U.S. Justice Department, with instructions to subject them to "high priority examination." In late July, FFRF dismissed its suit, and issued a press release boasting of "a major coup;" the IRS had agreed to set up new procedures to pursue what FFRF called "rogue political churches."
So what are these procedures? What did the IRS tell FFRF? How are churches to know when they're being monitored—when their pastors' sermons and other activities are under scrutiny from federal bureaucrats? In short, just what is the IRS up to?
The agency didn't say—not then, and not since, despite religious-liberty groups' best efforts to find out.
"That raises all kinds of red flags in my mind," says Erik Stanley, senior legal counsel of the Arizona-based Alliance Defending Freedom (ADF). "The IRS has never made its procedures public, and apparently has secret procedures. Here they are again, doing the same thing with churches that they did with the Tea Party groups. There's no accountability there, no transparency."
So ADF has launched its own lawsuit to find out what's going on. And after more than a year of facing delaying tactics, they might—just might—be on the verge of getting answers.
How We Got Here
If you wonder how we got to the point where churches need to worry about the IRS when they address issues with a political dimension, blame LBJ.
For most of our history, pastors spoke freely about such issues—and, in fact, about candidates for office. In 1954, however, Lyndon Johnson—then a U.S. Senator seeking re-election and facing a well-funded challenger—slipped in an amendment to a tax-overhaul bill providing that tax-exempt entities couldn't make statements supporting or opposing any candidate. Though Johnson was concerned with his secular opponents, the broad language included churches—which have been intimidated ever since. (Churches whose views are considered conservative, anyway. Critics of the IRS point out that some churches routinely endorse liberal candidates—even allow them to address their congregations from the pulpit—without government harassment.)
"In the private sector, there's a lot of fear of the IRS, and the general approach is 'don't mess with them,' " says Steve Riggle, founding senior pastor of Grace Community Church in Houston. "Churches take the same approach.
"There's also lots of misinformation and pastors are in a fog because they aren't trained in law," he adds. "So you tend to err on the side of caution to the point where you don't speak out on things that you should."
ADF believes the Johnson Amendment is unconstitutional, and has been trying to get a case challenging it into court since 2007. (See "Getting the IRS Out of the Pulpit," page 16.)
Churches have received some protection, though. In 1984, President Ronald Reagan signed the Church Audit Procedures Act, specifying that no church may be audited without approval from a high-ranking IRS official—at least at the level of regional commissioner, one step below the agency commissioner. "The point was to protect churches from politically motivated audits—from what the Tea Party groups just went through," Stanley says.
That law prevailed until the mid-1990s, when the IRS abolished the office of regional commissioner and reorganized itself—not by regions, but by practice groups, such as small business, large business, individuals and exempt organizations. Under the new system, the IRS switched the power to approve audits on churches to the commissioner of exempt organizations.
"That was the fox guarding the henhouse," Stanley says. "The person in charge of auditing churches was the person in charge of approving auditing churches. It clearly did not comply with the 1984 law."
In 2009, a federal court agreed. Judge Ann Montgomery of the U.S. District Court in Minnesota upheld a lower court's ruling that this official was much too low on the food chain—four levels below the IRS commissioner—for such weighty decisions.
After that rebuke, the IRS apparently shut down its ongoing audits and stopped launching new ones. This was always intended to be a temporary situation until it could adopt new procedures that would pass court muster, Stanley says: The agency proposed new regulations to do so, but as of the 2012 elections, hadn't formally adopted them.
That's when the Freedom From Religion Foundation got impatient.
Something to Hide?
Throughout the 2012 election year, FFRF pushed the IRS to resume punishing "electioneering." By that, the group meant not just churches talking about specific candidates, but about election-related issues—such as when a bishop in Madison, Wisc., stated that "no Catholic, in good conscience" could support candidates promoting abortion, same-sex marriage or violations of religious liberty, or when Billy Graham's ministry took out newspaper ads stressing those same issues.
So the group sued the IRS and the two sides reached an agreement amenable to FFRF. Which brings us back to the question: Just what was in that agreement?
"It raised some eyebrows with us," ADF Litigation Counsel Christiana Holcomb tells Citizen. "The (IRS's new) procedures were not filed with the court. So we filed a Freedom of Information Act request with the IRS to find out what they were.
"Since that time, the IRS has stonewalled us, month after month after month."
At no point did the agency outright refuse to deliver the records, which would have been illegal. Rather, it kept promising to do so, but never did.
On Aug. 28, 2014, an IRS official wrote Holcomb to say they'd produce the records by Sept. 29—more than two weeks past the latest date allowed by federal law. But they didn't: In fact, agency officials didn't respond at all until Jan. 29, 2015, when they wrote to ADF claiming they'd asked for more time on Nov. 26 (false, Holcomb says: ADF never got that request) and they would respond by March 31.
They never did that, either. And in April, seven months past the required deadline for delivering records, ADF reached the outer limits of patience.
"No federal organization should be able to flagrantly disregard the law and their statutorily mandated deadlines," Holcomb says. "Certainly no citizen would be able to get away with that if they were ignoring the IRS's deadlines. It's a double standard."
So in April, ADF filed a lawsuit to force the IRS to cough up the records. To that end, the lawyers sought representation from other lawyers with experience in this area—Judicial Watch, a legal group specializing in digging up the kind of information government agencies are reluctant to divulge.
Judicial Watch President Tom Fitton was quick to see a connection between recent IRS scandals and its dealings with FFRF regarding churches.
"This agency has a record of demonstrated hostility to the First Amendment," Fitton tells Citizen. "That includes the massive violation of First Amendment rights during the 2012 election to suppress an entire political movement and help ensure President Obama's re-election.
"It's no coincidence that they're targeting pastors and religious institutions that are seen as opposing President Obama or his agenda. And it's especially disturbing that they appear to be working hand-in-glove with a radical outside group that doesn't like any religion."
Culture of Fear'
Faced with that lawsuit, the IRS has again pledged to deliver the records to ADF—but slowly and in pieces. At press time, one batch had been promised in July; a second, in August; a third, in September.
"It'll probably be several more months before this is resolved," Fitton says. "We'll get some information, but I predict a lot of information will be redacted and blacked out."
Stanley isn't surprised. "The IRS has the obligation to make these documents public, and we intend to hold their feet to the fire," he says. "But we're going to have to drag it out of them. And we will. Churches have the right to know how they're going to be treated by the IRS, not subjected to some secret backroom process."
Meanwhile, Fitton's staff—which includes 20 or so attorneys, paralegals and investigators—continues using the Freedom of Information Act to ferret out information on other IRS misconduct.
In July, Judicial Watch said it had found evidence that the IRS had been collaborating with the Department of Justice and the FBI to bring criminal charges against conservative groups, and that "the IRS likely violated federal law by sharing 1.25 million pages of (confidential) taxpayer information with DOJ."
A central figure in this effort was Lois Lerner, the former IRS official who had driven its pursuit of conservative nonprofits. When congressional investigators subpoenaed her emails, seeking evidence of collaboration with other agencies or political figures that might show she had not acted alone in targeting those groups, the IRS claimed in June 2014 that all of her emails to anyone outside the agency had been "irretrievably" lost in a computer crash. The claim was widely scoffed at, and since that time investigators have found tens of thousands of those emails in a search that remains ongoing.
So when Fitton looks at his group's work with ADF to protect churches, he looks at it from a historical standpoint—as part of a larger, long-term struggle that should concern all Americans, churchgoing or not.
"The IRS is all too often used as a tool to suppress political opposition against the establishment, the state or coalitions in power," he says. "It's an ongoing threat. We have to be vigilant and understand that the government is going to abuse its authority unless the citizenry keeps it in check."
From his standpoint as a pastor, Riggle is grateful for the effort. "Every government agency, including the IRS, should be monitored by those whom we have elected to represent us—and by citizen groups like Alliance Defending Freedom," he says.
And although Riggle's church is one of the sort FFRF would call "rogue," he thinks the institution that's truly out of control is centered in Washington, D.C.
"It's the IRS that has gone rogue," Riggle says. "It has way too much power and it's abused that power way too often. It's created a culture of fear. That has to stop."