I.R.S. Finds Sharp Increase in Illegal Political Activity - New York Times

I.R.S. Finds Sharp Increase in Illegal Political Activity - New York Times

As a follow-up to the post on T. Boone Pickens donating millions and then taking control of how the charity invested those millions, now comes this article on how charities are not following the 501(c)(3) and other provisions for churches, foundations and not-for-profit charities.

The I.R.S. said yesterday that it saw a sharp increase in prohibited political activity by charities and churches in the last election cycle, a trend that it aims to reverse as the country heads into the midterm elections. Mark W. Everson, the I.R.S. commissioner, appearing for a speech on Friday in Cleveland.

The tax agency found problems at three-quarters of the 82 organizations it examined after having received complaints about their political activities, according to a report the Internal Revenue Service released. The infractions included distributing materials that encouraged people to vote for particular candidates and giving cash to campaigns.

The problem is that most charities have difficulty finding high quality management teams or find management teams that get political in the process of advocating for their cause.

The agency said it was seeking to revoke the exemptions of three organizations but did not name them, pending an appeals process. Charities are generally prohibited from campaigning for candidates, although they can take stands on issues. The internal revenue commissioner, Mark W. Everson, devoted much of a speech to a civic group yesterday in Cleveland to the subject. "We've seen a staggering increase in money flowing into campaigns, and the question is whether all this money is encroaching upon and polluting the charitable sector," Mr. Everson said in a telephone interview before his address. "We saw a disturbing amount of political intervention in charities in the last election cycle."

I honestly feel that the IRS should release the names of these organizations so that the public making donations to these charities could get the word and make an informed decision as to the donation.

Barry W. Lynn, executive director of Americans United for Separation of Church and State, which has filed dozens of complaints about churches' political activities, said, "It's no longer possible for critics to say the I.R.S. is blind or toothless, because this announcement is a pretty major indication that they are serious about educating charities and about imposing appropriate penalties."

Churches and charities are allowed to comment on issues, but are not allowed to endorse--or denounce--a political candidate or political party in an outright manner. Certainly a charity can say that a policy is immoral, bad policy or even criticize the actions of an elected official as long as they do not advocate for removal of that official, nomination of other candidates, or endorsement of candidates or parties.

The complaints by the group include one on July 15, 2004, against Jerry Falwell Ministries, saying falwell.com had endorsed President Bush and urged readers to donate $5,000 to the Campaign for Working Families. Such activities are illegal, Mr. Lynn said, and the Web site was quickly changed.

In my view--and it is just my view--Jerry Falwell, Oral Roberts, Bob Jones Ministries, and Pat Robertson have breached the IRS regulations on multiple occasions... or come really close to the edge of doing so. Robertson and Falwell are always speaking of political action, including the suggestion of assassinating President Chavez of Venezuela.

Almost half the tax-exempt groups under examination are churches. Churches played a pivotal role in the 2004 elections, and the Republican Party, in particular, harnessed their influence to register, educate and deliver voters. Both parties are cultivating churches for future elections. Democratic senators have been courting the Rev. Rick Warren, who draws more than 20,000 people a week to his Saddleback Church in Lake Forest, Calif., and the North Carolina Republican Party made waves when its leader sent an e-mail request for church directories.

My mother-in-law is an enrolled agent at the IRS and tax specialist for H&R Block. She also served as a church secretary for 30 years. There were many time when she had to rein in pastors and state overseers from going over the brink of the IRS rules. But many churches do not understand the rules and the authority that gives the IRS the power to limit political activities. There are ways around some of the rules. For instance, one church formed a grass roots organization that was completely separate from the churc, had separate board members, filed under state and IRS rules as a separate entity and rented space in church-owned facilities for their meetings and activities.

Of the 47 complaints against churches under investigation, 37 were found to have merit. The agency found that three had no merit, and seven examinations were pending. Over all, 82 of 110 examinations have been completed.

All Saints Church, a liberal Episcopal church in Pasadena, Calif., is among those awaiting a decision. The agency began an investigation after a former pastor gave a sermon in which he imagined a debate among Jesus, President Bush and Senator John Kerry and in which he criticized the Iraq conflict.

This particular case is one of over zealousness on the part of the IRS and involves criticism of the morality of the current administration policies, not the endorsement or advocacy for impeachment of any candidate. There was, according to independent reports, no political activities as defined by the IRS... however, they were critical of the "war on terror," the invasion of Iraq and the policies concerning the poor and needy.

A lawyer for All Saints, Marcus Owens, said he did not know the status of the investigation. "The I.R.S. agent assigned to All Saints doesn't even return my calls," Mr. Owens said. "The I.R.S. sent an inquiry and then an examination letter. It has never done anything further."

Gee... stonewalling by a government representative... what a surprise!

Mr. Owens also represents the National Association for the Advancement of Colored People, whose chairman, Julian Bond, gave a speech in July 2004 sharply critical of Mr. Bush and Vice President Dick Cheney. The N.A.A.C.P. declined to cooperate in the following investigation, and Mr. Owens said it had not heard from the I.R.S. since early last year.

Mr. Owens, who formerly led the unit in the agency responsible for overseeing tax-exempt groups, said he had concerns about the report. "I wonder whether or not all the 50 or 60 organizations they identified as having engaged in illegal political intervention really did have significant issues," he said. "That having been said, give me an hour and my computer and I can sit down and give the I.R.S. 200 good audit leads on questionable political activity."

One of the problems is judging when a charity or church has crossed the line... and properly investigating the motivations of those making complaints. Certainly there is room for unscrupulous people to make false or misleading complaints.

Last month, a group of religious leaders representing Christian and Jewish denominations filed a complaint against two large politically active churches in Ohio, Fairfield Christian Church and World Harvest Church, and their leaders, the Revs. Russell Johnson and Rod Parsley. The churches, which deny wrongdoing, said the I.R.S. had not contacted them since then.

Having done some technical consulting for the Massachusetts Chapter of the Christian Coalition, there were several times when board members needed to slow some of its more conservative members down. One of the tactics of the Christian Coalition is to distribute the voting records of representatives and senators in state and federal bodies, as well as write ups that identified candidates and elected officials by their positions on abortion, the death penalty, family values and other issues... and often these articles and newsletters skated on thin ice.