The Freedom From Religion Foundation and the Internal Revenue Service are poised to resolve FFRF’s closely-watched federal lawsuit challenging the IRS’s non-enforcement of anti-electioneering restrictions by tax-exempt churches. The expected settlement would be a major coup for FFRF, a state/church watchdog and the nation’s largest freethought association, now topping 21,000 members.
FFRF and the IRS filed an agreement on July 17 to dismiss the lawsuit voluntarily, following communications from the IRS that it no longer has a policy of non-enforcement against churches. The settlement would allow FFRF to voluntarily dismiss its lawsuit “without prejudice,” meaning FFRF can renew the lawsuit if the IRS reverts to its previous inaction. As of press time, District Judge Lynn S. Adelman, of Milwaukee, had not yet ruled on the agreement.
However, the agreement is being disputed by an obscure Milwaukee-area church, Holy Cross Anglican Church, which is intervening in the case and is represented by the Becket Fund for Religious Liberty.
“We’re proud that FFRF’s litigation should ensure that the IRS will now resume enforcing the law, and go after churches which abuse their tax-exempt privilege by attempting to illegally influence the outcome of elections. Otherwise, churches will become unaccountable PACs, congregations could turn into political wards, and donations to the collection box could be used for political purposes. FFRF’s litigation will help safeguard our democratic election process,” said FFRF Co-President Dan Barker.
FFRF filed suit against the IRS shortly after the presidential election in 2012, based on the agency’s reported moratorium on enforcing the electioneering restrictions against churches and religious organizations. No 501(c)(3) entity, including churches, may retain tax-exemption if it endorses political candidates.
Yet the IRS had no procedure in place to initiate churches examinations, after a Minnesota district court invalidated the IRS’ prior procedure in 2009. Church groups began to notoriously and openly engage in politicking from the pulpit, including at annual organized events to flout the law known as “Pulpit Freedom Sunday.” An IRS official publicly reported in 2012 that the IRS had an on-going moratorium on making church tax examinations, in spite of flagrant and public electioneering by churches and religious organizations.
On June 16, a year and a half after first filing suit, FFRF received its first information from the IRS indicating it no longer has a policy of non-enforcement against churches. FFRF’s counsel, Richard L. Bolton, also discussed the policy with the Department of Justice, and on June 27, FFRF was apprised that the IRS has a procedure in place for “signature authority” to initiate church tax investigations or examinations.
Complicating the practical effect for now of the settlement is the global moratorium currently in place on IRS investigations of any tax-exempt entities, church or otherwise, while Congress conducts its probe on IRS tea party policies.
The intervening church filed a motion insisting: “FFRF should not be in a position to drop this lawsuit and file an identical lawsuit (and again put the Church’s interests in jeopardy) a week, a month, or a year in the future.” The Becket Fund has asked the federal court to dismiss the suit “with prejudice,” so that FFRF could not renew its challenge if the IRS reverts to taking no action on violative churches.
On July 29, FFRF filed a response making it clear FFRF will only dismiss voluntarily if “our agreement has teeth,” said FFRF Co-President Annie Laurie Gaylor, “to ensure that we can resume the suit if anti-electioneering provisions are not enforced in the future against rogue political churches.”
Alliance Defending Freedom, which is the force behind Pulpit Freedom Sunday, and which has proclaimed Oct. 5 Pulpit Freedom Sunday this year, also got into the act, filing a Freedom of Information Act request after learning of the July 17 agreement, insinuating that the IRS was withholding information.
Contrary to the intervenor’s contention, “there is nothing strange, collusive, or concealed here,” noted the IRS in a July 22 motion filed with the court.