Bob Bauer on 501(c)(3) Politics: Should the IRS stay out of it?

A report produced by the Commission on Accountability and Policy for Religious Organizations calls for the reform of the IRS ban on campaign intervention by 501(c)(3) groups. Government Regulation of Political Speech by Religious and Other 501(c)(3) Organizations (2013). It makes the point that the test by which the IRS judges political intervention is loosely constructed and unpredictable in application. The report also notes the additional problem that IRS enforcement is erratic; this is not the agency’s favorite assignment and the agency by and large either does what it can to avoid it, or gives up quickly in the face of dedicated resistance. The report’s authors, presenting their recommendations to Senator Chuck Grassley, propose a remedy in two major parts: one to address the treatment of “no cost” sermons and other religious statements made in the ordinary course of a religious organization’s operations, and the other to cover any other institutional expenditures for political purposes. The first of the recommendations makes sense, but the second does not. Its first recommendation captures what is largely the state of current IRS enforcement directed against sermons and other forms of religious commentary delivered in the course of worship services. The agency dislikes the communication of plainly partisan messages in sermons, but it is loath to take action against them. An example is a protracted controversy over a California church sermon that included, during the 2004 Presidential campaign, criticism of President George W. Bush and warm words for his opponent, then-Senator John Kerry. The IRS investigated the matter, concluded that the sermon’s political content was inconsistent with the Church’s tax status—and declined to take further action. Rebecca Trounson, IRS Ends Church Probe But Stirs New Questions, Los Angeles Times (September 24, 2007). The report notes that a number of churches now regularly draw attention to their refusal to follow the prescribed legal line, but the IRS has generally refused to take the bait.

501(c)(3) Politics