Churches can lose their federal tax exemption if they distribute partisan voter guides, according to an "urgent memorandum" prepared by two of the nation's leading nonprofit tax law authorities.
In the memo and a supporting legal analysis released this week, Washington, D.C., attorneys Milton Cerny and Albert G. Lauber Jr. explain that churches and other religious ministries face serious penalties if found to be engaging in partisan political activity by the Internal Revenue Service.
The issue is especially relevant now because the Christian Coalition, an ultra-conservative political group founded by TV preacher Pat Robertson, has announced a campaign to distribute 45 million "voter guides" through fundamentalist churches. Critics charge that the Coalition guides are partisan and rigged to favor certain candidates at the expense of others.
"If a church distributes a partisan voter guide," wrote Cerny and Lauber, "it will constitute improper political activity by the church, even though someone else prepared the guide.
The memo explains that the IRS has already expressed a "zero tolerance" attitude toward church politicking.
"Election activity by charities, including churches, continues to be a subject of intense IRS interest," observe Cerny and Lauber. "The IRS has stated that it will have 'zero tolerance' for violations, noting that the law 'prohibits all forms of participation or intervention in any political campaign,' even if the charity's involvement is 'subtle' or 'inadvertent.'
"The IRS National Office in Washington recently advised regional IRS offices to develop new audit projects focusing on electioneering by non-profits," the attorneys continued. "The consequences of an IRS audit can be severe, including loss of the church's tax exemption and ability to receive deductible contributions, as well as monetary penalties against the church and its officials."
Cerny and Lauber are partners in the law firm of Caplin & Drysdale, Chtd. Cerny was formerly Chief of the Exempt Organizations Ruling Area at IRS and Technical Advisor to the Assistant Commissioner, Employee Plans and Exempt Organizations. Lauber previously served as Deputy Solicitor General in the Department of Justice, with principal responsibility for litigating tax cases before the U.S. Supreme Court. Both have written extensively on the issue of nonprofits and electioneering activities.
For details and a complete examination of the legal memorandum, please read the analysis prepared by Cerny and Lauber.
"The law is clear," said Americans United Executive Director Barry W. Lynn. "Churches that play partisan politics are risking their tax exemptions.
"Churches that distribute the Christian Coalition's biased voter guides should reconsider," he added. "The Coalition is trying to lure churches into its political machine, but it would be unwise to take such a risk."
Lynn noted that Christian Coalition Chairman Pat Robertson's Christian Broadcasting Network was recently penalized by the IRS for improper political activity.
"I certainly wouldn't take tax advice from someone who just had his own problems with the IRS," Lynn observed.
Lynn said the Cerny/Lauber memo and other information about IRS rules governing churches and politics will be distributed nationwide during the next few weeks.
Americans United is a religious liberty watchdog group based in Washington, D.C. Founded in 1947, the organization educates Americans about the importance of church-state separation in safeguarding religious freedom.