When Can the IRS Investigate Your Church?

At what point do agents within the Internal Revenue Service decide to investigate a church with regard to its tax-exempt status?

In light of the IRS Targeting Scandal, it’s a valid question with a potentially terrifying answer for many congregations around the country. But officials with the tax-collecting agency have no intention of answering it.

Two years ago, the Alliance Defending Freedom filed a request under the Freedom of Information Act for records related to secret procedures for investigating churches. The existence of the secret procedures became known through the agency’s settlement of an atheist group’s lawsuit, but the IRS has stonewalled the release of details.

The IRS refused to produce any records for a full year. When it finally started producing documents in July 2015, months after ADF filed suit through its attorneys with Judicial Watch, the agency withheld more than 10,000 out of 16,000 pages requested, and of the pages it did produce, more than 2,000 are almost entirely blacked out.

Now ADF is asking the court to order the IRS to comply with its legal duty to justify the thousands of records withheld or else produce them.

“The IRS is not above the law, and Americans deserve to know the truth about the agency’s secret deals with activists,” ADF Legal Counsel Christiana Holcomb said. “The IRS has a legal obligation to explain why it is hiding things or else produce the documents. Its ongoing refusal to follow the law is absurd, particularly since much of we are asking for is information that the IRS has already provided voluntarily to Freedom From Religion Foundation.”

The whole matter stems from a legal settlement between the IRS and FFRF in Freedom From Religion Foundation v. Koskinen. The IRS assured the atheist group that it had adopted new protocols and procedures for church investigations in order to end the lawsuit.

In July 2014, a Freedom From Religion Foundation press release announced it had reached a settlement with the IRS in its lawsuit against the agency. As the release revealed, “The IRS has now resolved the signature authority issue necessary to initiate church examinations. The IRS also has adopted procedures for reviewing, evaluating, and determining whether to initiate church investigations.”

The FFRF press release mentioned the ADF-sponsored “Pulpit Freedom” movement as a motivation for its lawsuit, which urged the IRS to enforce what’s known as the “Johnson Amendment” against churches. That law authorizes the IRS to regulate sermons and requires churches to give up their constitutionally protected freedom of speech in order to retain their tax-exempt status.

ADF and Judicial Watch filed the motion to compel Friday with the U.S. District Court for the District of Columbia in Alliance Defending Freedom v. Internal Revenue Service. Several members of Congress, at least one state attorney general, and a number of concerned organizations have also asked the IRS to come clean on its settlement with FFRF.

“The Obama IRS first ignored the ADF FOIA request and is now stonewalling in federal court,” Judicial Watch President Tom Fitton said. “The public has the right to know about any new IRS guidelines for investigating the practice of our basic First Amendment freedoms.”