Senate Inquiry - Is it Appropriate?

According to the Tax Guide for Churches and Religious Organizations, the IRS may conduct civil tax inquiries and examinations of churches under IRC section 7611. The IRS may only initiate a church tax inquiry if the Director, Exempt Organizations, Examinations, reasonably believes based on written statements of the facts and circumstances, that the Church:

1. may not qualify for the exemption; or
2. may not be paying tax on an unrelated business or other taxable activity

In November 2007, the Senate Finance Committee issued a letter of inquiry to six prominent televangelists asking for a number of specialized documents and reports relating to board governance, compensation and ministry operations.

Based on various news releases, four of these evangelists are responding or are committed to respond to Senator’s Grassley’s inquiries. Senators Grassley and Baucus have defended their positions on “why” they would like to evaluate this information.

However, under the Tax Guide for Churches and Religious Organizations, the IRC section 7611 provides examples of how/when an inquiry are appropriate.

Is it appropriate for the Senate Finance Committee to solicit selected information from the televangelists and churches?

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