MYNORTHWEST NEWS

Where is the line between the IRS and churches?

Aug 30, 2015, 7:58 AM | Updated: Aug 31, 2015, 5:37 am

A prominent TV personality is shining a light on the vague regulations between churches and the IRS...

A prominent TV personality is shining a light on the vague regulations between churches and the IRS. Former state attorney general and KIRO Political Analyst Rob McKenna weighs in on difficult line that is drawn between them. (AP)

(AP)

The divide between America’s churches and the IRS has always been more of a gray area than a solid line.

Television host and comedian John Oliver has recently put that gray area under the microscope by forming his own religious organization in order to accept donations from his audience. His mission is to shine a light on how some churches, especially televangelists, take in massive amounts of money with promises of healing and prosperity; it’s all legal and tax free. His church: Our Lady of Perpetual Exemption.

It seems to have worked. Oliver has received box loads of checks, which had KIRO Radio’s Dave Ross scratching his head over the issue.

“Is this really indeed legal?” Ross asked.

The short answer is “yes.” But there’s a longer answer that isn’t so simple, as former state attorney general and KIRO Political Analyst Rob McKenna points out.

“I think if you were to try this at home, you might very well find yourself under IRS scrutiny and going under an audit,” McKenna said. “The fact is that they do audit self-proclaimed nonprofits, including religious institutions. And churches have to be careful in order to not lose their tax exempt status.”

There’s a very good reason for those audits, as McKenna knows firsthand.

“I know from my work as attorney general how many charitable frauds there are,” he said. “Every time there is a natural disaster, people spring up and claim to be raising money to help the victims of that disaster and are actually pocketing the proceeds.”

While the IRS does look for charitable tax cheaters, there is only so much the government force can do. One reason, McKenna said, is that the government shies away from the controversial constitutional topic of church and state. It can be difficult to determine exactly what qualifies as a genuine religion.

“It is true, that when you have a constitutional principal based on faith, based on what someone says they believe, you are going to run into this problem,” McKenna said. “In most cases, the problems self-correct because most people aren’t taken in. But when you look at some of the megachurches and the many, many millions of dollars they collect and then spend on jets for the pastor, it does cause you to wonder where the appropriate line is to be drawn.”

The IRS also can’t go after every fundraising organization because of its own funding issues.

“The IRS has had a lot of its budget cut, and has brought some of that on itself by apparently using some of its auditors for political purposes,” McKenna notes. “That’s unfortunate because they really need to be above reproach.”

“One thing that conservatives and liberals can always agree on is that no one likes a tax cheat,” McKenna said. “Religious conservatives certainly have to be embarrassed by the antics, whether by John Oliver or people who actually, seriously portray themselves as religious figures when they aren’t … I think he’s on to something here and it’s another reason we need to look at how the IRS is doing its job.”

Which speaks to a key solution that isn’t easily attained.

“There’s never enough enforcement,” McKenna said. “Just like with the charities example I gave, you really have to exercise common sense as a consumer and a potential donor.”

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Where is the line between the IRS and churches?