Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof… First Amendment to the US Constitution
Let me say first of all, I cannot watch a prosperity theology preacher on TV without spiking my blood pressure. And their off-screen antics go beyond the pale of anything a reasonable person should tolerate. These false prophets are distorting the Good News of Jesus Christ and causing a lot of collateral damage to His church. Anything the US Government can legally do to them is far too gentle. I would rather apply the Old Testament penalty for false prophets. (Here, hold my coat.)
Having said that, the actions of the Senator Charles Grassley (R) of Iowa to investigate six televangelist ministries may have far more significant collateral damage to the church than anything Creflo, Eddie, Benny, Joyce, Paula and Kenneth can do.
It takes years to build a reputation, and only a brief visit with a rabid reporter to destroy one. That is why the ministry I represent, Village Missions, zealously pursues accountability and transparency. We voluntarily submit to ECFA standards. We file a Form 990, even though as a church organization we’re not required to do so – you can see it here. We raise money only for genuine ministry needs. We take the stewardship of our donor’s trust very seriously.
The problem with Grassley’s actions though, is that there is legislation in place already to deal with the excessive abuses of church leaders. The Internal Revenue Service can initiate audits of churches, provided that they follow IRC Section 7611.
Chip Watkins, a lawyer in Washington D.C. has posted an excellent comment on this:
“The Senate Finance Committee has no business initiating these investigations. By doing so, the Committee evades tax law requirements that protect churches from unnecessary and multiple intrusions by the government. The IRS is the proper agency to undertake an audit (examination) of whether these churches continue to qualify for exemption under Sec. 501(c)(3) of the Internal Revenue Code. But before doing so, the IRS must satsify Sec. 7611 of the Code, which permits the IRS to open a 90-day “church tax inquiry only after a high-ranking IRS official (which should be the Commissioner of Exempt Organizations) certifies that he reasonably believes that the church may not qualify for exemption, or may be subject to unrelated business income tax. If the IRS’ concerns are not satisfied by the response to the inquiry, it may then open an audit after an initial explanatory meeting with the church and its representatives. The churches should respond accordingly.”
Charles Grassley, who loves to pontificate on nonprofit issues, is going around the law. No doubt Senate committee hearings will ensue and all the Senators will compete to see who’s pithy sound bites will make the evening news.
Politicians and televangelists- these guys deserve each other.
The EO division of the IRS is highly stressed – there’s no way they have the resources to engage in these audits.
The way NFP stuff seems to work w/ the IRS is that there’s some high-level prodding (either via Grassley or scandal) followed by either change of law/reg or enforcement. The IRS doesn’t have the resources to regulate ex ante, so someone else attacks ex post, and drives the IRS into action.
That said, why does it bother you that Grassley is looking into these organizations? It doesn’t seem clear to me why you’d defend organizations that clearly have been abusing their exemptions.
By: jpe on November 7, 2007
at 10:32 pm
Sorry, should’ve added: Grassley isn’t going around the law. By the express terms of the statute, the limiting provisions of 26 USC 7611 apply only to the Treasury Dpt and its agents, which excludes Grassley’s committee.
The notion that he’s circumventing the law is simply false.
By: jpe on November 7, 2007
at 10:35 pm
Hi JPE:
Thanks for your insight. I appreciate the clarification, although the role of the Senate Finance Committee seems to be the question of some debate, given Chip Watkin’s comments.
My motivation is not to defend the ministries under scrutiny, but I am concerned that the bad behavior of these few will result in an erosion of church organization’s constitutional rights. There are too many critics out there who want to paint every church with the same brush and characterize every evangelical preacher as Elmer Gantry.
I am also skeptical of the efficacy of congressional hearings. They shed more heat than light and are little more than a bully pulpit for politicians who love to hear themselves talk.
If Grassley really wanted to fix something he could quietly compel Acting Commissioner Stiff and Director Lerner to let the dogs out.
Which do you think would be more intimidating to a televangelist? A close-up on C-Span, or a cadre of Revenue Agents here to seize your hard drives?
By: jimcross on November 8, 2007
at 1:12 am
Hi Jim. I’ve looked around your blog quite a bit in the time between commenting and moderation, and it looks like a cool blog. I’m pleased as punch that you’re as committed to transparency as you are – and to stretch a metaphor, that punch is especially sweet since I used to audit churches’ financial statements.
I’m going to break our disagreement into its constituent parts; I think that, once the facts are made clear, we’ll agree some things and disagree on others. There are two issues that are related to constitutionality: first, as a purely factual matter, there’s nothing unconstitutional about these investigations specifically, and there’s nothing unconstitutional about IRS or Senate oversight generally. Senate oversight is plenary: there’s virtually nothing that Grassley could do in discharging his oversight duties that could be found unconstitutional as a court. Similarly, the IRS would have to do a lot to step into unconstitutional terrain. As a lawyer w/ plenty of experience auditing churches and working w/ their CFOs, I can assure that the IRS isn’t even miles within that point. They’re – maybe – a light year from that point.
As a policy matter, I agree that it would be wrong for Grassley to single churches out, and would violate the spirit of the First Amendment if not the letter. However, he’s been very aggressive w/ non-profits in strikingly even-handed fashion. He’s gone after museums, conservation groups, supporting organizations, credit bureaus and hospitals – some class of NFP had to be next, so it may as well be churches.
Well, this is getting too long, so I’ll leave it at that. If we still disagree materially, so be it: smart & reasonable people can disagree about things like this, and it wouldn’t be the first time I’ve been at odds with the CFO of a church!
By: jpe on November 8, 2007
at 2:27 am
Hi JPE:
I really appreciate your excellent contribution. I would much rather receive an education from you than the Feds!
Thanks!
By: jimcross on November 8, 2007
at 5:18 pm