IRS

The Internal Revenue Service’s investigations into alleged tax violations by two Minnesota-based churches have been thwarted by procedural problems. Those cases highlight the special tax-exempt status churches receive under federal law, but also problems at the IRS. While reforms are underway, the religious right is planning to take advantage of a neutered IRS by encouraging a mass law-breaking day when churches endorse candidates from the pulpit.

Religious right leaders are celebrating the postponement of an IRS complaint against a Warroad, Minn., pastor alleging he violated tax laws when he twice endorsed Sen. John McCain from his pulpit in 2008.

Advocates and economists say support for such a program misses lessons from the housing crisis.

An Arizona-based front group for the religious empire of James (Focus on the Family) Dobson, the Alliance Defense Fund, is encouraging en masse violation of the IRS rule that prohibits clergy from endorsing political candidates. They’re asking ministers of kindred spirit across the country to endorse presidential candidates on Sunday, September 28.

In a letter sent to supporters on Saturday, Pastor Mac Hammond of Living Word Christian Center wrote that “enemies of the gospel, often politically motivated,” are behind an ongoing Internal Revenue Service probe of the church. Hammond and Living Word are the target of an IRS audit investigating allegations of excessive compensation as well as [...]

The Internal Revenue Service is investigating whether Living Word Christian Center violated the law for favorable compensation and loan dealings it gave to church founder and pastor Mac Hammond. Those compensation and loan dealings were first reported by the Minnesota Independent in February 2007.

The church has resisted demands by the IRS to open its books for an audit, and the agency filed a petition in United States District Court ordering the church to comply. Earlier this month, a magistrate ordered the church to appear and explain its refusal to comply with the IRS. In response to a summons in March, a church attorney told the IRS they would not comply until “an appropriate high-level IRS official” using “reasonable belief” requested information.