The vagueness of a 60-year-old Internal Revenue Service rule barring clergy from endorsing political candidates should bring its demise, the chairman of a commission created to examine how the agency regulates churches and other religious groups tells Newsmax TV.
"The law and its administration today are simply unenforceable and have created a very serious problem in America with respect to enforcement of the tax laws," Michael Batts, chairman of the Commission on Accountability and Policy for Religious Organizations, tells Newsmax in an exclusive interview.
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"The law itself and the guidance that the IRS has published are very vague, and religious and nonprofit leaders are never quite sure where the lines are as far as what is permissible communication.
"A number of religious organization leaders also consider the law to be unconstitutional," Batts adds. "In fact, last year, more than 1,600 pastors deliberately gave sermons in their churches speaking about candidates, specific candidates. Some of them even transcribed their sermons and had them sent to the IRS with a request to be audited.
"That's been happening since 2008 — and the IRS has not reacted to that challenge," he says.
The commission was created in 2011 by Republican Sen. Chuck Grassley of Iowa after a four-year investigation into the financial activities of six high-profile televangelists.
The panel operates under the auspices of the Evangelical Council for Financial Accountability, an accreditation body for religious organizations founded in 1979 and based in Winchester, Va.
Earlier this week, the group that Batts chairs released a report examining the issues surrounding political expression and religious organizations. An earlier report, released in December, addressed issues related to enhancing accountability for such organizations.
Batts is a certified public accountant and is the president and managing partner of Batts Morrison Wales & Lee, an accounting firm based in Orlando that serves nonprofit organizations. He is a member of ECFA's board, once serving as its chairman.
The author of three books, Batts was recently recognized by the National Association of Church Business Administration for his service to the church community.
Since 1954, the IRS has barred religious and other nonprofit organizations with 501(c)(3) tax-exempt status from participating or intervening in political campaigns.
"It is the only law of its type on the books," the commission's report says. "The only law that allows the Internal Revenue Service to evaluate the content of a sermon delivered by a member of the clergy. The only law that could cause a church to lose its federal tax exemption based on the words spoken by its leaders in a worship service.
"Federal government officials also know instinctively that the law, as currently interpreted and applied, is problematic — which is why the law is largely unenforced in some respects and inconsistently enforced in others."
Batts echoes that sentiment to Newsmax.
"We have an unenforceable, vague law," he says. "The reality is that the IRS has no interest whatsoever in going into houses of worship all across the country and attempting to change them fundamentally or revoke their tax exemption for understandable reasons."
The IRS rule, further impedes free speech, Batts says.
"There's no question that this law has a chilling effect on speech as it relates to political topics, especially in the religious arena. And one of the main reasons for that is that the law and the related guidance are so vague.
"The IRS has said in its official publications that you have to look at all of the facts and circumstances about a particular communication to determine whether it violates the law or not," he tells Newsmax. "It's not just whether you say something specifically endorsing a candidate or opposing a candidate.
"In fact, the IRS says that depending on the exact words you use, or the timing with which you make the statement, you can be in violation of law — even if you don't specifically endorse a candidate.
"The fear of that kind of vagueness is great, and for good reason," Batts concludes. "If you cross the line, the IRS can revoke your exempt status."
He does not believe, however, that the agency has used the rule to specifically target religious organizations, in light of revelations that the IRS has singled out tea party, conservative, and other religious groups in its applications for 501(c)(4) tax-exempt status.
The exempt status allows the organizations to keep their donors private.
"Despite the challenges that the IRS has, generally, the people who operate the IRS have a desire to do what's right," Batts tells Newsmax. "The issue is more the fact that the law creates a real dilemma. It's a real problem — and the IRS has a sensitivity to the First Amendment concerns.
"The bigger picture issue here is that the vagueness in the law and these issues are as much a problem for the IRS as they are for the organizations that have the concerns," he adds. "So the Internal Revenue Service would be just as welcoming of a change as some of the organizations that have problems with the law."
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