IRS denies tax-exempt status to Christian org accused of being too political; appeal filed

A general view of the U.S. Internal Revenue Service (IRS) building in Washington.
A general view of the U.S. Internal Revenue Service (IRS) building in Washington. | REUTERS/Jonathan Ernst

A Christian group is appealing a decision from the Internal Revenue Service denying nonprofit exemption status due to the government believing that its endeavors are too political.

Christians Engaged filed an appeal Wednesday to a decision by the IRS denying the organization an exemption under Section 501(c)(3), which would allow the group to be legally considered a charitable organization and receive benefits like tax-deductible contributions.

The organization filed for the status in 2019 and received a notice of denial from IRS Exempt Organizations Director Stephen A. Martin on May 18.

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The appeal argues that the IRS' argument is flawed in three ways, namely that it invented “a nonexistent requirement that exempt organizations be neutral on public policy issues."

The appeal contends that the agency wrongly assumed that "Christians Engaged primarily serves private, nonexempt purposes rather than public, exempt purposes because he thinks its beliefs overlap with the Republican Party’s policy positions." 

First Liberty Institute, a conservative legal nonprofit that often handles religious freedom litigation, filed the appeal on behalf of Christians Engaged. The appeal argues that the IRS engaged “in both viewpoint discrimination and religious discrimination.”

“Only a politicized IRS could see Americans who pray for their nation, vote in every election, and work to engage others in the political process as a threat,” said First Liberty Counsel Lea Patterson in a statement.

“The IRS violated its own regulations in denying tax exempt status because Christians Engaged teaches biblical values.”

Last month, the IRS argued in a letter that the group was too political in its goals.

“You engage in prohibited political campaign intervention,” Martin wrote.

“You are also not operated exclusively for one or more exempt purposes within the meaning of Section 501(c)(3), because you operate for a substantial non-exempt private purpose and for the private interests of the [Republican] party.”

Martin further argued that the Christians Engaged is precluded from tax-exempt status because the group works to instruct people on what the Bible says about issues such as the sanctity of life, marriage and justice that "generally distinguish candidates and are associated with political party platforms."

However, First Liberty Institute argues that Christians Engaged "does not produce voter guides or otherwise suggest that recipients should vote for or against any particular candidate or candidates."

Martin informed Christians Engaged that it had “a right to protest if you don’t agree” and gave the organization 30 days from May 18 to file an appeal.

Christians Engaged is led by conservative activist Bunni Pounds, who ran for Congress in 2018 but lost in the Republican primary. The organization's vice president is Trayce Bradford, who previously led the pro-family advocacy group Texas Eagle Forum.

In 2013 during the Obama administration, the IRS garnered national outrage when the agency admitted to having targeted conservative groups' tax-exempt applications that included the terms “Tea Party” or “Patriot” during the 2012 presidential election season.

Lois Lerner, then director of the IRS Exempt Organizations Division, offered an apology for these attacks, stating at the time that it was “absolutely inappropriate and not the way we should do things.”

“Sometimes people do things because they don't understand the rules or don't think about it,” added Lerner, who insisted that the targeting was not political because it involved "mistakes" and a lack of "good judgment" by low-level employees.    

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