By: A.J. Cook


"Bill Clinton is promoting policies that are in rebellion to God's laws," said the advertisement by the Church at Pierce Creek.

When the Internal Revenue Service challenged the church's tax-exempt status, because of the ad, it started a nine-year battle between the agency and the New York church.

The church's ad, in the Washington Times and USA Today, ran two presidential elections ago. It attacked then Gov. Clinton's moral character and said his abortion and homosexuality policies conflicted with theology.  It also said, "Christian Beware. Do not put the economy ahead of the Ten Commandments." The ad concluded, requesting tax exempt contributions.

The IRS started the confrontation with a letter stating "a reasonable belief exists that you may not be tax-exempt" and asked the church for information "to better understand your activities."

The church, however, took the position this wasn't prohibited political activity; it was a "warning to members of the Body of Christ." After the church failed to respond to most of the requests, the agency revoked the exempt status.

Then Pierce Creek went to court and gave three reasons why it should prevail:

• The IRS violated its right to free speech.  The court countered that an exemption is a method of subsidizing churches and the First Amendment doesn't require the government to subsidize political debates.
• The IRS violated the law providing that government shall not burden a person's exercise of religion. The court countered that the lost exemption may deter some people from contributing, but this doesn't impose a burden on its members' exercise of religion.
• The IRS was selectively prosecuting Pierce Creek. Other churches have political candidates speak from the pulpit, and nothing happens to them.  The court countered that this case was different. Other churches had not so brazenly claimed responsibility for a political advertisement in national newspapers and simultaneously solicited tax-deductible donations.

The court upheld the exempt status revocation.

The Moral: The IRS giveth, but for those who fail to follow its commandments, it taketh away.

A.J. Cook is a lawyer and CPA. His tax column appears weekly in numerous newspapers. Why isn't it published in your hometown newspaper? Ask its Business Editor to subscribe.

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Released 2-7-00