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Ronald Reagan Presidential Library
Digital Library Collections
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Collection: Blackwell, Morton: Files
Folder Title: Internal Revenue Service
Church Auditing Briefing
(1 of 3)
Box: 36
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WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name BLACKWELL, MORTON: FILES
Withdrawer
RBW 6/22/2011
File Folder
INTERNAL REVENUE SERVICE CHURCH AUDITING
FOIA
BRIEFING (1 OF 3)
F06-0055/07
Box Number
36
POTTER, CLAIRE
40
DOC Doc Type
Document Description
No of Doc Date Restrictions
NO
Pages
1
PAPER
RE. PRESIDENTIAL BRIEFING [PG. 1]
1
ND
B6
Freedom of Information Act [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
A CALL FOR CHRISTIANS TO UNITE IN PRAYER AND FASTING FOR AMERICA
PRAY AND FAST FOR AMERICA NOVEMBER 4, 1983
PRAYER FOCUS: AIDS, CAP ACT, ABORTION
INTERCESSORS FOR AMERICA
November 1, 1983
Vol. 10, No. 11
Newsletter
Dear Intercessor,
Before the U.S. Congress at this time is pending legislation
ment and Kenneth M. Duberstein, President Reagan's chief con-
which deserves our fullest prayer support. Termed the CHURCH
gressional lobbyist, "demanded that the Department testify in
AUDIT PROCEDURES ACT his bill would curb harassment of
favor of the measure." The White House also pressured the IRS
legitimate churches by the Internal Revenue Service during tax
specifically to support the bill, according to congressional aides
investigations and audits.
familiar with the CAP Act.
We're made increasingly aware of abuses in such audits, with
However, during the hearings, IRS Commissioner Roscoe L.
the IRS acting virtually without restraint under the broad powers
Egger, Jr. was not as supportive of the bill as requested by the
spelled out in Section 7605(c) of the Internal Revenue Code.
White House, but rather defended current IRS church audit pro-
Only the most determined and financially secure churches have
cedures as sufficient and stated that the Service was "sensitive
been able to withstand IRS demands for financial records, lists
to the nature of the church-state relationship."
of contributors, and church minutes. Such documents, the IRS
has contended, are necessary to determine whether the
A former IRS agent who testified spoke out in direct opposi-
organization is, by their definition, a church, and thereby tax
tion. William J. Lehrfeld, now a Washington attorney, said,
exempt. If such information is not provided, the church's tax ex-
"There is no justification whatsoever, under the current Inter-
empt status can be automatically revoked, requiring legitimate
nal Revenue Code, and its administration, to give religion,
churches to go to court to have their exempt status upheld.
despite its constitutional privileges, the relief contemplated by
this bill."
The problem will only intensify as the IRS, with greatly increas-
ed manpower in the church-audit field, begins monitoring com-
"It should not surprise anyone that the Internal Revenue Ser-
pliance with the January 1, 1984 requirement for churches to
vice is opposed to the Church Audit Procedures Act," said Tedd
pay in to the Social Security System (F.I.C.A.) for its non-ordained
N. Williams of the Rutherford Institute during the hearings.
staff.
Another observer, a Christian who attended the hearings was
The CHURCH AUDIT PROCEDURES
more explicit. "I saw a spiritual force at
ACT (CAP Act) will amend the Internal
work (in the I.R.S.) which left unchecked
Revenue Code to clarify the procedures
would kill the Church. I would term it the
IRS may use in auditing churches.
THE CHURCH AUDIT
spirit of Jezebel. It cannot stand to have
Nothing in the bill affords the churches
PROCEDURES ACT
its power, its authority taken away.
anything exceptional or extraordinary. In-
Beneath its shell of cooperativeness, it is
dividual taxpayers and corporate tax-
by
brazen, pompous, malicious!" Our
payers are afforded similar rights under
John Beckett
brother concluded by saying, "The Body
IRS regulations. The uniqueness is con-
of Christ needs to wake-up to this spiritual
tained only in the fact that the procedure
force."
would be a matter of law, not regulation.
The legislation has a remarkably broad base of support, in-
We are asking for a three-fold response.
cluding the National Association of Evangelicals, The Moral Ma-
First, please pray for the religious freedom of the churches
jority, the National Council of Churches, and the American Civil
of America, and that the IRS powers, now confronted and ex-
Liberties Union (strange bedfellows, indeed!). Seventy-five con-
posed, will yield to the restraint which the CAP Act would provide.
gressmen from thirty states have co-sponsored the legislation
in the House.
Secondly, the supporters of this bill need more specific ex-
amples of IRS contact with churches and church-affiliated
Most recently, on September 30, hearings on the bill were
schools, whether or not their tax-exempt status was upheld.
held by the Senate subcommittee which oversees activities of
Please report cases to National Integrity Forum, P.O. Box 2701,
the IRS.
Washington D.C. 20013.
Prior to the hearings, the Washington Times reported that
Finally, contact with your congressman and your senator is
the White House favors passage of the CAP Act and ordered
very timely, expressing your views on this legislation.
the Treasury Department to support the legislation over
It is refreshing to see godly legislation which we can support,
"vigorous objections" from the IRS. The Times article said that
and we indeed thank those who are courageously undertaking
John Svahn, head of the White House Office of Policy Develop-
this battle on behalf of the Church. May the victory be the Lord's.
AIDS: A Moral and Political Time Bomb
By Dr. Ronald S. Godwin
"The mysterious, horrible, and incurable disease spreading
and hemophiliacs are being struck down in ever greater numbers
like bubonic plague through the homosexual enclaves of New
via contaminated blood transfusions.
York and San Francisco-brings forth an inescapable conclu-
A particularly tragic fact is that AIDS has now become the
sion. There is social and political dynamite here, waiting for a
number one cause of death among vulnerable, defenseless
fuse." These words from a carefully documented column by
hemophiliacs-many of which must have 30 to 40 transfusions
highly respected, conservative journalist, Pat Buchanan, set off
a year just to survive. In order to get enough clotting material,
a furor in every city where Mr. Buchanan's columns appear.
blood from as many as 20,000 donors must be pooled. One con-
Gays screamed that the nationally known television and
taminated blood donation out of 20,000 can threaten the life of
newspaper journalist was a "Nazi." Federal health officials held
a hemophiliac.
press conferences and called him an "alarmist." Buchanan
How long the communicable organism incubates inside the
simply responded with a second column, letting additional
body before a victim learns of its deathly presence seems to vary
graphics and more facts speak for themselves. While he was
between six months to three years. A Brooklyn woman, widely
about his column, Mr. Buchanan raised a fundamental ques-
written about in the New York Post, died after having blood
tion that must be faced sooner or later by all of us. We will deal
transfusions three years earlier with no other known exposure
with that question a bit later. But first, consider what is known
since.
about AIDS.
AIDS Facts
AIDS is deadly-that much is known. All 1979 and 1980
AIDS patients are dead. Of those suffering from AIDS for as long
The most fearful fact about AIDS, aside from its 100% lethal
as two years, 82% no longer suffer-they too are dead! No one
death toll, is the mystery which surrounds it. This mystery
has been known to survive AIDS to date.
renders the calming assurances of federal health authorities
suspect at best-and, perhaps, even irresponsible.
More precisely, AIDS knocks out a person's immune
defenses and then allows some of the most horrible killer
AIDS (Acquired Immune Deficiency Syndrome) strips the
diseases known to man to ravage the victim's body. AIDS symp-
body of its immune defense system, by which it normally fights
toms include diarrhea, fever, swollen glands, and weight loss.
off otherwise deadly diseases.
Two examples of the "killer
Circumstantial evidence, repetitively amassed, indicates that
diseases" that attack AIDS pa-
AIDS is an infectious, communicable disease. The com-
tients are: Kaposi's sarcoma
"Do not lie with a man a
municable organism is probably viral, perhaps, similar to a
and Pneumocytis Carinii
is detestable. Do not have
leukemia virus-though even more deadly.
pneumonia. Kaposi's sarcoma,
and defile yourself with i
AIDS appears to transfer from victim to victim via bodily
a cancer of the skin, often turns
In any of these ways, beca
fluids-blood, semen, possibly lymph-possibly via saliva and
the faces of many AIDS victims
/ am going to drive out be
bowel matter. Just how communicable AIDS can become is
into purplish, swollen masks of
the land was defiled; so /
simply not known by anyone at this time, making the public
horror while covering their
land vomited out its Inhab
statements of the health authorities out of date and irrelevant
bodies with open lesions. It is
in a matter of days.
usually irreversible. Pneumo-
land, it will vomit you ou
cytis Carinii pneumonia savage-
that were before you. Ev
AIDS is most frequently, in fact, primarily, spread by
homosexual contact. The more promiscuous the homosexual,
ly wrecks its sufferers before kill-
detestable things - such
the greater his risk. The bloodier the homosexual act, the greater
ing almost all of them.
their people. (Lev. 18:2
the risk.
Somewhat less lethal but
Drug abusers and eventually their wives seem to fall victim
even more communicable are a
via contaminated needles. Infants, children, surgical patients,
host of other epidemic "gay diseases," being spread inside and
outside the gay ghettos of America. Some examples follow:
Hepatitis A, extremely common in homosexual circles, can be
REPORTED
passed on via food and water, which means people are at risk
CASES
every time they eat in a restaurant where an active homosexual
works. People in Minneapolis and San Francisco have learned
2000
The number of
this the hard way.
1972
reported cases of
AIDS has risen
Hepatitis B, an infection of the liver, is untreatable and often
dramatically.
causes cirrhosis and finally death. Hepatitis B can be passed
Source: Center of
from a carrier to a new victim by blood transfusion, by con-
1500
Disease Control,
taminated needles (drug addicts), by semen, and by saliva. Den-
Atlanta, GA
tists who drill the teeth of hepatitis B victims face a special risk.
People who indulge in the "Hollywood kiss" with homosexuals
or who have close and repeated social contact may also find
1000
such behavior dangerous.
Amebiasis, shigellosis, and giardiasis are diseases of the
593
bowel. Shigellosis sometimes kills children. In San Francisco,
500
the Health Department found that 10% of the food handlers they
tested had one of these highly communicable diseases and that
101
70% of this contagious group admitted to being homosexual.
What gays do to each other, according to Dr. Paul Cameron,
81
82
83
an expert on homosexual practices, frequently involves the in-
gestion of waste from the bowels of one or both partners. Semen
and blood are also often ingested or absorbed through tears or
breaks in the skin. Under such circumstances, over 97% of male
homosexuals suffer from cytomegaloviris (a virus). No wonder
diseases like gonorrhea, syphilis, hepatitis A, hepatitis B,
amebric bowel ailments, herpes, and AIDS spread like wildfire
in and outside the gay community.
38%
In short, what gays do to each other makes them sick and more
and more frequently, dead! But, even more alarming, what gays
do to each other has begun to spread the diseases they carry
to exponentially increasing numbers of defenseless, heterosex-
uals whose only mistake was to need a blood transfusion, to
Of the 1,972 people known to have AIDS as of August 1, 1983, 759,
or 38%, are now dead.
decide to eat in a certain restaurant, or to secretly choose a bi-
Source: Center for Disease Control, Atlanta.
sexual mate.
Why did the prison officials take immediate and decisive steps
The Politics of a Plague
to protect the prison population while federal health authorities
Obviously, homosexuals need our help; most certainly, those
only "ask" homosexuals with obvious AIDS symptoms to refrain
who are sick need medical help; and, in fact, millions of dollars
from donating blood? Because, in this writer's opinion, prison
are already being spent on AIDS research. The Public Health
officials did not have to worry about political repercussions.
Service has gone so far as to call AIDS its number one priority.
But as laudable as these activities are, there is still something
More specifically, why have federal health authorities not
very wrong about the way health officials and government
stipulated, as Pat Buchanan's column suggested, that homosex-
authorities are handling this epidemic.
uals (1) be forbidden from working in food handling businesses,
(2) be forbidden to donate blood-both on pain of legal penal-
This writer believes that what is wrong can be traced to what
ty? That these simple steps are possible is obvious from what
someone has called "the politics of a plague."
other free countries are doing to protect their citizens.
A rhetorical shell game is go-
An article in the New York Tribune dated June 16, 1983 states,
ing on here. When Legionnaires
Disease struck and when Toxic
"France has started screening blood donors in a bid to prevent
lies with a woman; that
Shock Syndrome surfaced, the
the often fatal disease AIDS from spreading through blood
relations with an animal
health authorities moved im-
transfusions. Under rules set out by the Health Ministry, poten-
tial donors will have to respond to searching questionnaires con-
Do not defile yourselves
mediately and decisively to pro-
cerning their sex life, drug habits and country of origin, in an
is how the nations that
tect the general public. There
attempt to set up "clean" blood banks." If France can protect
became defiled. Even
was no lecturing people about
French citizens, why can't equal protection be provided
it for its sin, and the
their prejudices, just quick, firm
American citizens?
And if you defile the
action to protect ordinary
citizens.
But Buchanan asks the fundamental question, "Which takes
vomited out the nations
precedence, the right of gay men to equal and courteous treat-
who does any of these
So why the sudden preoc-
ment at the blood bank or the right to life of three million Americans
must be cut off from
cupation about public attitudes
who need transfusions every year?"
on the part of health authorities
28-29)
while an epidemic becomes
Therefore, officials who moralistically claim that those who ask
pandemic before our eyes? Why
to be protected from the carriers of deadly diseases are panic
the exhaustive debate over how
stricken hate-mongers, argue speciously. There are actually
much AIDS research is enough research, while millions of
millions of Americans who do not hate homosexuals. Rather,
Americans are left to wonder what is being done to protect them?
they believe on deeply held religious grounds that homosexuality
The answer is to be found in the fact that the homosexual lobby
is morally wrong. They further believe they have a right to have
blood transfusions without fear of contracting cancer.
is so powerful and the homosexual influence in the media so
pervasive that an entire nation stands essentially defenseless
They believe that young children and hemophiliacs should be
before a malignant minority-unable to take the simplest steps
protected from AIDS! They believe that an unsuspecting public
to protect itself while it wrings its hands in impotent self
should not have to worry about catching hepatitis and amebic
condemnation.
bowel disorders from eating food in public restaurants.
Cons Better Protected
Over the last two decades, Americans have become increas-
The general public, then, has a right to question why prisoners
ingly tolerant of homosexuals and "homosexual practices."
are being afforded better protection from AIDS and other sex-
What consenting homosexuals did in private was of no real con-
ually transmitted diseases than is the general public. The New
cern to all too many of the last several generations.
York Post, Wednesday, June 1, 1983, carried a story saying that
Now it turns out that homosexuals and their practices can
four Rikers Island cons had died from AIDS and that at least
threaten our lives, our families, our children, can influence
six more prisoners are battling the incurable disease.
whether or not we have elective surgery, eat in a certain
Fearful that the epidemic had found a captive audience on
restaurant, visit a given city or take up a certain profession or
which to feed inside New York City jails, the head of the city's
career-all because a tiny minority flaunts its life style and
correction officers demanded that (1) the correction department
demands that an entire nation tolerate its diseases and grant
undertake a program of continual medical examinations to
it status as a privileged minority.
diagnose AIDS among inmates, (2) AIDS carriers be "isolated"
Reprinted with permission from the July, 1983 Moral Majority Report. Dr. Ronald
from non-contaminated individuals, and (3) "all homosexuals
S. Godwin Is the Executive Vice-President of the Moral Majority. He has a PHD
be prohibited from serving food to other inmates at Rikers Island
in Planning and Management from Florida St. University, is Assistant to the Presi-
dent of Liberty Baptist College and is a contributing author to the Moral Majority
and other city prisons."
Report.
WASHINGTON, D.C. - Federal District Court Judge Joyce Hens
NOVEMBER PRAYER FOCUS
Green has ordered the federal Office of Personnel Management
AIDS - (See article pages 2 and 3) That God would pre-
to admit the Planned Parenthood Federation of America into the
vent the spread of this dreaded disease to the general
Combined Federal Campaign, the charitable fundraiser among
public, use it to expose the depravation of homosexuality
the 4.7 million federal employees. Judge Green cited what she
and cause those who are practicing homosexuals to re-
alleged was the bias of OPM Director Donald Devine against
pent and totally reject their detestable life style. May He
Planned Parenthood because of its proabortion stance. (National
have mercy and bring healing to those AIDS victims who
Right To Life News)
repent and turn to Him.
SOUTH CAROLINA - President Reagan continued his efforts
CHURCH AUDIT PROCEDURES ACT - (See article page
for tuition tax credits and a constitutional amendment to allow
1) That it would be approved by Congress and im-
oral group prayer in public schools in a speech at the Universi-
plemented to limit the authority of the IRS, and protect
ty of South Carolina. Reagan said the federal government can
Christian organizations from unnecessary, burdensome
help restore education excellence "by encouraging parental
audits.
choice and competitition, and that's exactly what we want to do
through our programs of tuition tax credits and vouchers." And,
ABORTION - Let us continue to be vigilant in our prayers
in reference to school prayer, "I just have to believe that the
for the unborn. Call upon God to send a spirit of repen-
loving God who has blessed this land and thus made us a good
tance throughout our nation, expedite legislation to pro-
and caring people should never have been expelled from
hibit legalized abottions and bring an end to this holocaust
America's classrooms." (EP)
soon.
Washington Watch
NATIONAL REPORTS
Franklin Square, one of the major business hubs in
WASHINGTON, D.C. - The Senate Judiciary Committee approv-
downtown Washington, continues to be troubled by open
ed a bill recently to permit students to use public school facilities
prostitution and pornography sex shops. Recently D.C.
for prayer or Bible study after classes. The committee voted 11-4
government officials and the Neighborhood Association
to send the full Senate a proposal by Senator Jeremiah Denton
have teamed up in a new effort to clean up the area.
(R, Ala.) requiring public elementary and high schools to give
(Washington Post, Oct. 3, 1983)
students the same right to use classrooms or auditoriums for
religious purposes as they have for student clubs. (Washington
Let us thank God for this initiative, one of the first. Pray
Times)
that it will be successful, and ask God to release fur-
ther initiatives.
WASHINGTON, D.C. - A new Gallup Poll reflects what pollster
George Gallup, Jr. describes as "a rising tide of interest and
Let us intercede too, for the pastors and churches of
involvement in religion among all levels of society, and particular-
D.C., that they will be strengthened and hold forth the
Gospel without compromise.
ly among Protestants" in this country. A telephone sampling of
1,029 adults indicated that six out of ten Americans said they
were currently more interested in religious and spiritual matters
MIDDLE EAST: A CALL TO INTERCESSION AND
than they were five years ago. At the same time, Gallup said
OCCUPATION
that only about 12 percent of the poupulation could be classified
as "highly committed" to their religious faith. (Washington Post)
IFA Research Director, Gary Bergel, visited Israel and
ARIZONA - Sisters of Canaan in the Desert, Phoenix, report that
Lebanon in early August to prepare an update on the
Paramount Pictures plans to make a film taken from the "grossly
spiritual, political and military climate in the Middle East.
blasphemous" book, "The Last Temptation of Christ," by Nikos
An account of his findings has been documented in a
Kazantzakis. The book depicts Jesus gripped with sin and lust,
report available for distribution.
fighting desperately against being the Messiah. Filming is sup-
The report begins with a biblically historical review of
posed to start in mid-January, 1984. Write to: Paramount Pic-
the land of Canaan, and points out that the Israelites'
tures, 5555 Melrose Ave., Los Angeles, CA 90038, Attn: Mr.
failure to obey God by tearing down the Canaanite altars
Robert Chartoff and Mr. Erwin Winkler.
and completey possessing the land has led to the conflict
WASHINGTON, D.C. - The U.S. Senate has unanimously pass-
that exists there today.
ed a series of amendments to the "Protection of Children Against
Gary goes on to explain the Church's Commission, the
Sexual Exploitation Act" of 1977. The bill specifies hefty in-
Canaanite-Islam connection, that Canaanite Strongholds
creases in fines and closes two loopholes. Not only will porn-
still exist, and concludes with evidence of the Holy Spirit
for-profit be outlawed, but non-commercial trafficking as well.
moving in a very special way throughout that area.
Further, distribution of all child pornography would be outlaw-
To obtain a copy of this report, please send your request
ed, not simply that which can be adjudged legally "obscene."
with $1.00 to IFA. We believe you will find it very enlighten-
(NAE Washington Insight)
ing and informative.
The newsletter is published monthly by INTERCESSORS FOR AMERICA, P.O. Box 1289, Elyria, Ohio 44036, a tax-exempt,
non-profit organization. Your contributions provide our financial support. Contents may be quoted or reprinted, provided
excerpts are in context. News items warranting national prayer attention, or reports of answered prayer are welcome.
Please provide supporting documents where possible. Your IFA staff: John Beckett, President; Guy Kump, Executive
Director; Gary Bergel, Director of Research; Jean Ziegler and Tamarah Johnson, Secretaries. (216) 327-5184.
file IRS
October 26, 1981
Mike Coleman
P.O. Box Z
Mobile, AL 36616
Mr. Morton Blackwell
The White House
Room 191
Washington, D.C. 20500
Dear Mr. Blackwell,
I want to thank you for the time you took out of your
busy schedule to meet with myself and Roy Adams of Senator
Denton's staff on October 9th. I am very grateful for your
assistance in helping us get a bill passed through Congress
reforming Section 7605 (c) of the Internal Revenue Code which
deals with church audits. It looks like Senator Grassley
will sponsor the bill on the Senate side and that Congress-
man Mickey Edwards of Oklahoma will sponsor the bill on the
House side. As you stated in our meeting, there are no
political downsides or negatives to this bill. This bill
will not tie the hands of the I.R.S. from being able to audit
illegitimate, tax-abusing churches, but it will, in fact,
provide greater due process to those legitimate churches
and hopefully avoid abusive practices by the I.R.S. toward
legitimate churches.
You stated an interest in calling a White House briefing
which Elizabeth Dole would chair to discuss the merits of the
bill once the bill has been introduced and I do plan to notify
you when that happens. I wanted this letter to serve as an
expression of my gratitude for your help. I trust that your
trip to Alaska went well. John Whitehead and I continue to
work together on this piece of legislation. Thank you for
your assistance.
Sincerely,
Mike Coleman
Mike Coleman
Church Financial Administrator
MC/bh
March Bell- 224-6572
Orix Hatch's office
4 attorneys. - /RS +Chencles
want high level
neeting w/ Ed Mease
or President
Orin Briggs-
former Thursond
Ustaffer
#
William Ball
Robert Toms -
you met him them
w/ Heb Elling wood
Counsel- assoc. for
Christian Schools
John Me Lario -
plus
LA w/ Sen. Crassley
has been working
on this - and other
LAS are interested
March Bell wants
to know if this
worth pursuing
He has done case
work on this + is
Knowledgable on
this issue - if they write warranted legislation will
plus 3 sexators - telms,
aimstrong, Thurmond
have written letters-
COMMISSIONER OF INTERNAL REVENUE
Washington, DC 20224
UN 20 1981
Honorable Hank Brown
U. S. House of Representatives
Washington, DC 20515
Dear Mr. Brown:
I am responding to your letter dealing with the subject
of Internal Revenue Service policies towards private, tax-
exempt schools. Your letter also raises issues concerning
the litigation in Wright V. Miller, Civil No. 80-1124 (D.C.
Cir.) and Green V. Regan, Civil No. 1355-69 (D. D.C.) as
well as with the effect of the Ashbrook and Dornan Amend-
ments.
Your letter raises the question of intervention in the
Wright case by private school groups. You should be aware
that in the Wright case, the court has allowed the Reverend
Wayne Allen on behalf of the Briarcrest Baptist Schools of
Memphis, Tennessee, to intervene in that litigation as a
party. That case has been appealed to the Court of Appeals
by the plaintiffs and a decision is expected in the near
future.
In Green, the court has allowed Clarksdale Baptist
Church to intervene. You should note that in response to
Clarksdale's Motion to Intervene, the Department of Justice
advised the court that the Service had no objection to the
granting of the Church's motion and that, if requested by
the court, the Department would file a brief supporting
intervention by the Church. It is my hope that the granting
of intervention will give the court the opportunity to focus
on the troubling First Amendment issues that have been
raised.
You also question whether, in light of the Ashbook and
Dornan Amendments to the 1980 Treasury Appropriations Act,
the Internal Revenue Service and the Department of Treasury
may comply with the revised injunction entered in Green in
1980.
I have carefully reviewed this matter and, after con-
sultation with the Office of Chief Counsel and the Department
of Justice, I have concluded that the Internal Revenue
Service is required to obey the Green orders. This position
PRESERVATION
COPY
Department of the Treasury
Nonorable Hank Brown
-2-
is supported by well-settled principles of statutory inter-
pretation and the legislative history to the Amendments. In
connection with the debate regarding the Fiscal 1980 Appropria-
tions Act, Representative Ashbrook stated that this Amendment
was intended to prohibit the Service from going forward with
new rules until the Congress or a court acted.
The subject of policy towards private, tax-exempt
schools is currently being studied within both the Treasury
Department and the Internal Revenue Service. We have
received letters from both religious and secular private
schools expressing their concerns in this area. In studying
this matter we have identified several aspects of the prior
proposed revenue procedures with which we disagree. We
are presently working toward a solution to these problem
areas which takes into account major concerns which were
expressed with respect to those procedures. You may be
assured that the suggestions we have received will be
carefully considered in formulating the policy of this
Administration regarding private, tax-exempt schools.
With kind regards,
Sincerely,
Poseol Eggn
June 4, 1981
Mr. Powell Moore
White House Legislative Liaison
1600 Pennsylvania Ave.
Washington, D.C. 20500
Dear Powell:
I've attached a copy of a letter, and attachments, which
was recently mailed to Max Friedersdorf.
I have also attached a copy of my personal resume and a
copy of the certificate my wife received for working in the re-
cent presidential campaign.
Powell, you know how long I have worked in the vineyard,
and I think you fully appreciate that while my Christian friends
are thought to be too conservative or even reactionary in some
sectors of the party, they did contribute significantly to the
great Reagan victory. In fact, pollster Lou Harris attributed
them with providing two-thirds of the ten percent margin of
victory.
My point is simply this, the President has met with con-
servatives, he has met with black groups, he has met with
Puerto Rican groups, he recently met with Senator Kennedy, and
if there is any group that really deserves his attention it is
the evangelical/fundamentalist community who provided large
numbers of voters in his winning effort.
I would appreciate your personal intervention in this mat-
ter on behalf of me and my clients which represent nearly
five hundred thousand families in most of the states of the
union, and represent many many hundreds of thousands of fami-
lies who are their friends and associates.
Obviously, I am aware of the great demands on the President's
time, but frankly, this group is deserving of one short meeting
to make a very simple and meritorious request that the President
direct the IRS to take a long hard look at its policy of trying
to regulate church schools.
On March 3, 1981, the U. S. Supreme Court again affirmed
the right of church schools to be free from government regula-
tions by interpreting the federal Unemployment Tax Act as pro-
viding exemption for church schools from the federal unemploy-
ment tax and the scrutiny of state bureaucrats over the hiring
PRESERVATION COPY
Mr. Powell Moore
June 4, 1981
Page 2
and firing practices of church schools.
Let me thank you in advance for your consideration of this
matter and any help that you can provide.
Sincerely,
OGB/ag
Orin G. Briggs
enc.
Dec. 23, 1980
The Honorable Carroll A. Campbell, Jr.
1723 LHOB
Washington, D.C. 20515
Dear Carroll:
In the absence of knowing anyone closer to Governor Reagan
I feel compelled to write a letter of friendly suggestion with
regard to what appears to be a failure on the part of the new
administration to properly recognize its obligation and friend-
ship to hhe Christian/Moral Majority vote.
It is my understanding from having talked to Dr. Walt
Handford who is, as you know, pastor of a church in your district
with over 2000 members, and after talking to Dr. Charles Stanley,
Pastor of First Baptist Church of Atlanta, Georgia, that neither
Dr. Jerry Falwell, nor any other leader of the Fundamentalist
and Evangelical Christian community have been able to either
talk with Governor Reagan or get a specific message to him and
a response to that message.
Actually, I find this incredible, and seems to be a harbin-
ger of bad times for the new administration if they do not have
enough political wisdom to know that it is more important to
meet with your friends than it is to meet with a group of "black
leaders who did not vote for Reagan." It is even more astonish-
ing, when you realize that, according to Lou Harris, the "Moral
Majority" voters "gave Ronald Reagan two-thirds of his ten per-
cent margin in the election."
Carroll, as a spokesman for the Fundamentalist/Evangelical
vote in South Carolina which obviously helped provide the small
margin of victory in South Carolina, I feel like I must hasten
to say that, while this particular group of voters will never
vote for a liberal Democrat, they are not opposed to taking a
walk during an election; and I am afraid if there's not a proper
response from Reagan toward this group that you may very well
find that they'll stay at home in the next presidential election,
and maybe in the next congressional election two years from now.
Without belaboring the point any further, let me suggest
that you could significantly solidify your support among this
group in South Carolina if you could arrange the meeting with
Reagan.
PRESERVATION COPY
The Honorable Carroll A. Campbell, Jr.
Page 2
I know that Dr. Handford, as a moderator of the Southwide
Independent Baptist Fellowship, only wanted to express his sup-
port to the President-elect and urge him to be faithful to his
pledge for a conservative government free from excessive bu-
reaucracy.
Caroll, it is a shame that the President-elect has seen fit
to see all the special interest groups who are looking for
favors and yet has failed to meet with representatives of his
most faithful supporters who really are not looking for any
kind of handouts, but only wish an opportunity to assure the
President of their continued support of his efforts to work
for conservative government.
Sincerely,
OGB/ag
Orin G. Briggs
CC: Dr. Walt Handford
Dr. Bob Jones III
Dr. Bill Monroe
Dr. Charles Stanley
bcc: Jack Buttram
Elmer Rumminger
CARROLL A. CAMPBELL, JR.
BANKING, FINANCE AND URBAN
4TH DISTRICT, SOUTH CAROLINA
AFFAIRS COMMITTEE
SUBCOMMITTEES:
WASHINGTON OFFICE:
FINANCIAL INSTITUTIONS SUPERVISION,
REGULATION AND INSURANCE
ROOM 1723
INTERNATIONAL TRADE,
LONGWORTH HOUSE OFFICE BUILDING
INVESTMENT AND MONETARY POLICY
202-225-6030
GENERAL OVERSIGHT AND
Congress of the United States
RENEGOTIATION
DISTRICT OFFICES:
HOUSE ADMINISTRATION
P.O. Box 10183, FEDERAL STATION
GREENVILLE, SOUTH CAROLINA 29603
house of Representatives
COMMITTEE
SUBCOMMITTEES:
803-232-1141
Washington, D.C. 20515
ACCOUNTS
P.O. Box 1330
PERSONNEL AND POLICE
SPARTANBURG, SOUTH CAROLINA 29304
803-582-6422
January 12, 1981
CONTRACTS
Mr. Orin G. Briggs
1804 Bull Street
Columbia, South Carolina 29201
Dear Orin:
I have been mulling over your letter of December 23 since it was.
forwarded to me in South Carolina, and believe you have made
some understandable points -- understandable, particularly, in
view of how the media has been handling its coverage of the new
President's intentions toward his supporters in the Christian/
Moral Majority. As you know, the press has approached the
influence of Fundamentalist Christians on politics in general
and the Republican Party specifically in a rather senstionalist
manner and has, I believe, tended to over-dramatize imagined
slurs to that group. Quite frankly, I think the difficulty in
reaching President-elect Reagan has been due to two factors:
the enormity of the task facing him and the chaotic conditions
that admittedly prevail at the Transition Office. And, I am no
stranger to that difficulty myself. Since the election, I have
seen the President-elect only twice.
I am totally comfortable, however, with the continued, firm com-
mitment Governor Reagan has demonstrated both to the constituency
which elected him and to the principles on which he campaigned.
As a sense of organization replaces the euphoria and chaos that
characterizes the aftermath of a successful election, I am con-
fident that Mr. Reagan and his team will seek the advice of the
Fundamentalists who worked so hard for his victory. Certainly, I
am prepared to use whatever influence I may have to insure that
this is the case.
In the meantime, I am not blind to the fact that some individuals
have a perception of being left out. I am pleased to note, how-
ever, that my own conversations with Dr. Handford and others
indicate that they do understand that many of these apparent
problems are only a result of confusion during the Transition
period which will be ironed out in due course, and they in no
way dilute support for President-elect Reagan. Surely it is far
PRESERVATION COPY
Mr. Orin G. Briggs
January 12, 1981
Page 2
too early to be making judgments about the performance of the
new Administration which would dictate the actions any of us
would take in future elections. Of course, lack of partici-
pation in the political process is as good as support for a
differing political philosophy.
I appreciate your deep concern about access to the President-
elect, and share your sense of the importance of providing
Mr. Reagan with the best possible advice. I look forward
to working with you to see that this is accomplished.
With warm regards,
Canall
Carroll A. Campbell, Jr.
Member of Congress
CACJr/nm
CC: Dr. Walt Handford
JUL 20 1981
CALDWELL & TOMS
LAWYERS
611 WEST SIXTH STREET
520 CAPITOL MALL,SUITE 700
SACRAMENTO, CALIFORNIA 95814
EIGHTEENTH FLOOR
68 BOULEVARD de COURCELLES
(916) 447-6571
LOS ANGELES, CALIFORNIA 90017
75017 PARIS, FRANCE
(213) 628-1300
766 02 12
660 NEWPORT CENTER DRIVE
TWELFTH FLOOR
CABLE ADDRESS: CALTOMS
NEWPORT BEACH, CALIFORNIA 92660
TELEX 686142
July 11, 1981
Orin G. Briggs, Esquire
1804 Bull Street
Columbia, South Carolina 29201
Dear Orin:
I am just back from Washington, and I believe a strategy is shaping which
should do us some good.
Your reference to March Bell turned out to be very strategic as he was very
helpful. I also met with a volunteer special counsel to that same committee,
Mary Kaaren Jolly, and we talked through the problem and the strategy. Sen-
ator Grassley is on this committee also, and, as you know, he is also head
of the IRS Oversight Committee. Senator Armstrong was very responsive and
is prepared to assist us.
As you know, Presidential Counselor Morton Blackwell is responsible for
White House liaison with various groups including religious groups. They
have previously used the method of resolving conflicts between agencies and
various groups by holding a briefing in the White House, and in my conversa-
tions with him, he agreed to do this for us. The way it works is that we
would design, say, a four-hour hearing with testimony from our side, and we
would invite specified members of the IRS to come in and talk about their
policy toward religious organizations. We could ask them to answer specific
questions and deal with specific sub topics. The White House would bring in
a reporter, and the transcript would be available for our use later. If we
can design the participants and the content of that briefing, I think we can
produce an important transcript to use to our advantage in molding opinion
within the Administration and the various congressional committees, as well
as for reference in litigation including the appeal in the Bob Jones case.
Here is the scenario and timing that I would recommend for your consideration,
and I would appreciate your comments:
1. By the end of July, we should organize and request the White
House briefing to occur the last week in August.
PRESERVATION
CALDWELL & TOMS
Orin G. Briggs, Esquire
July 11, 1981
Page 2
2. At the same time, we should press ahead with the request
for the presidential briefing which should occur the second
week in September. I expect we will be able to use the am-
munition obtained in the briefing to good advantage in the
presidential briefing, and we can hand the President our
summary of it, with an advance copy to his aides and to our
friends throughout the Congress and its committees.
You have the strategy pretty well designed for the presidential briefing.
With regard to the White House briefing, let's have the request for the
briefing come in writing jointly from the Center for Law and Religious Free-
dom, the IRS Oversight Committee, the Committee on the Judiciary, and its
subcommittee on the Constitution, as well as personally from Senators
Thurmond, Grassley, Armstrong, East, and Helms.
From our side, I would suggest that Bill Ball be our principal spokesman
and that he put into the record a comprehensive summary of the most egre-
gious case histories, as well as a very effective constitutional brief and
argument. Like a good trial, I would recommend that we coordinate anything
else that is done from our side under that central strategy. The object
will be to create a record that could be used to great advantage in, (1),
molding opinion within the Executive and Legislative branches, (2), smoking
out opinions and strategies from the IRS to make them a better target, (3),
demonstrate that they are not only doing this in violation of the Constitu-
tion but are also wasting money while acting ultra vires, (4), prepare a
good package of the foregoing which can be summarized for the President.
Since getting the government to act is much akin to punching a marshmallow,
we need a strategy that will try to precipitate all this opinion into some
kind of direct action by the Executive Branch or the Legislative Branch to
forestall this offending activity.
Orin, my sense is that the timing now is very critical for this matter and
that we need to move ahead with all dispatch. I also believe that the
scale of effort is not adequate--that is, we are not putting enough time on
this matter. I think we should talk to Dr. Bob, III about your logging a
day or two a week, if necessary, in Washington to keep all of this on the
burner. If we are to impact the policy and affect the cases that are pend-
ing, I believe we should scale up our efforts now.
I would appreciate your personal comments; then I think we should have a
conference call with the other counsel to finalize our strategy.
CALDWELL & TOMS
Orin G. Briggs, Esquire
July 11, 1981
Page 2
Very BOB truly yours,
Robert L. Toms
RLT: im
CC: William B. Ball, Esquire
John J. McLario, Jr., Esquire
JUL 28 1981
LAW OFFICES
BALL & SKELLY
511 N. SECOND STREET
P.O. BOX 1108
HARRISBURG, PENNSYLVANIA 17108
WILLIAM BENTLEY BALL
TELEPHONE
JOSEPH G. SKELLY
AREA CODE 717
PHILIP J. MURREN
July 24, 1981
232-8731
RICHARD E. CONNELL
KATHLEEN A. O'MALLEY
Orin G. Briggs, Esq.
1804 Bull Street
Columbia, SC 29201
Dear Orin:
I have read Bob Toms' letter to you dated July
11 re an approach to the presidential briefing matter.
This sounds fine to me. There is an element of urgency
which I feel with respect to the project. I am be-
ginning to realize that IRS is going to do its own
thing, in its old ways, unless and until there is very
strong and perceptive corrective action by people above
who have the power to make changes but need to know
what changes are required.
Bob speaks of meeting the President the second
week of September. I expect to be in England then
(roughly from September 8 to September 22), but if that
plan goes awry, then on vacation elsewhere September
18 to October 4.
Very truly yours,
William B. Ball
WBB:dh
CC: Robert L. Toms, Esq.
John J. McLario, Jr., Esq.
SERVATION COPY
Varch Bell- 224-6572
have writter letters -
Cumstrong, Thurmond
Orix Hatch's office
plus 3 senators - Jelms
this issue - if write warranted legislation
4 attorneys - /RS +Chencles
they will
Knoledgable OK
want high least
meeting w/ Ed Meese
u ok on this + is
or President
He has done case
worth pursing
Orin Briggs- -
crytits must n
former Thrumond
March Bell wants
staffer #
LAS are interested
William Bad
on this - and other
Robert Toms -
has been working
you net him them
from wrs /m HY
w/ Heib Elling woul
plus
Counsel- assoc. for
I
Christian Schools
John, ic Lario -
file
JOHN W. WHITEHEAD
ATTORNEY AT LAW
did
P. O. BOX 409
OF COUNSEL
MANASSAS, VIRGINIA 22110
THOMAS S. NEUBERGER
ADMITTED TO PRACTICE IN
(703) 791-5179
DELAWARE
June 3, 1981
Mr. Morton C. Blackwell
Special Assistant to the President
The White House
Washington, D. C.
Dear Morton:
I am sorry we didn't get a chance to discuss the
I.R.S. auditing of churches. However, the materials we left
you are a good overview of the problem. Anything you can do
will be most appreciated.
If I can be of any assistance, feel free to contact
me.
With best regards, I remain,
Sincerely yours,
John W. Whitehead
carl task John if
6/16 JWW:vc 5.5 numba is
wants me to set up
he meeting/bricting him. with
I v RS people for
If so- - whomshould I
invite?
6/15 wants a builing + he will etc.
send he us list of people,
MEMORANDUM
OF CALL
TO:
YOU WERE Katiy CALLED BY
YOU WERE VISITED BY-
Jay Cole
OF (Organization)
PLEASE CALL
PHONE CODE/EXT. NO. 501.521.1758
FTS
WILL CALL AGAIN
IS WAITING TO SEE YOU
RETURNED YOUR CALL
WISHES AN APPOINTMENT
MESSAGE
RECEIVED BY
DATE
TIME
63-109
STANDARD FORM 63 (Rev. 8-76)
Prescribed by GSA
# U.S. G.P.O. 1981-341-529/26
FPMR (41 CFR) 101-11.6
Orin G. Briggs
James B. Carraway
Law Office
add to John whiteheal package
803-252-1700
Orin G. Briggs
1804 Bull Street
Columbia, South Carolina 29201
June 16, 1981
Mr. Morton Blackwell
Special Assistant to the President
for Public Liaison
Office of Public Liaison
Room 134
Old Executive Office Building
Washington, DC 20500
Dear Morton:
A lot of exciting things have happened since I talked to you during
the campaign about NICPAC support of a strong conservative.
The purpose of my letter is to send you a copy of recent correspondence
requesting a meeting with the President about the IRS involvement in
regulation of church schools.
I found out from your assistant that you were lending assistance to
an effort of John Whitehead to have a briefing with appropriate IRS
officials on the IRS policy of church audits.
Obviously these efforts should be coordinated, and I would defer to
your judgment as how best to accomplish this coordination. However,
it is my opinion that we are not likely to get any significant change
in IRS policy unless that instruction comes from the White House.
I would like very much to talk with you about this matter at your
convenience and would appreciate very much your advocacy on behalf
of our request which was made by Senators Thurmond, Helms, and
Armstrong. I have been informed by an attorney close to Ed Meese
that if the Senators call Max Friedersdorf and reaffirm their request,
we should be able to get a meeting with the President or at least with
Ed Meese. Your assistance and your suggestions on this matter will be
deeply appreciated.
Sincerely,
Drin G. Briggs
OGB:pwy
Mnited States Senale
WASHINGTON, D.C. 20510
May 22, 1981
Mr. Max L. Friedersdorf
Assistant to the President
for Legislative Affairs
The White House
Washington, D.C. 20500
Dear Max:
Since 1971, the IRS has proposed and has sought to implement
far-reaching new regulations which would require constant IRS monitor-
ing of church school admissions policies, church school activities and
school disciplinary rules.
As you know, there was a strong expression by Congress in opposi-
tion to the IRS policy toward church schools set forth in the Dornan and
Ashbrook amendments to the 1979-1980 Appropriations Bills for the Trea-
sury Department.
Frankly, those of us who have advocated that the IRS return to
its duty of collecting taxes and avoid a substantive policy-making role
have been encouraged by some recent statements by President Reagan. We
are also aware that, before any major modifications are made in a policy
as far-reaching as the policy espoused by the IRS toward church schools,
appropriate officials in the Reagan Administration would have to review
the proposals and likely ramifications.
Just recently, the IRS has instituted another monitoring program
which involves the agency sending detailed questionnaires to churches,
seeking information about the names and employment of board members of
the school, and other private information which we do not believe the
Service needs.
We believe it is safe to assume that the Administration is probably
reviewing this entire IRS policy, but we would like to suggest a means
of speeding up that review. Specifically, we request that a meeting be
arranged between President Reagan and four attorneys who represent a broad
range of church schools for the purpose of asking for a thorough and
objective review of this entire federal government policy. We believe
that this meeting is necessary in order to help the Administration for-
mulate a new policy for IRS review of church matters; we believe that
a new policy is warranted to prevent the financial ruin of hundreds of
church-owned schools and other legitimate religious organizations through
the enforcement of bureaucratic fiat.
Mr. Max L. Friedersdorf
May 22, 1981
Page Two
Let us conclude by quoting from a speech President Reagan made
at the Religious Roundtable National Affairs Briefing in Dallas, Texas,
on August 22, 1980. There President Reagan made a very unequivocal
promise to get IRS off the back of church schools and other legitimate
ministries of churches. On that particular occasion he said:
Fully backed by the White House, the Internal Revenue Service was
prepared to proclaim, without approval of the Congress, that tax
exemption constitutes federal funding. The purpose was to force
all tax-exempt schools -- including church schools to abide by
affirmative action orders drawn up by who else? IRS bureau-
crats.
On that particular point, I would like to read you a line from a
certain political platform, written in Detroit, about a month ago.
It goes like this: 'We will halt the unconstitutional regulatory
vendetta launched by Mr. Carter's IRS Commissioner against inde-
pendent schools.
We believe that the time has come 1.0 closely review the overly-
aggressive 1RS policy toward church schools and to develop a policy which
will preserve religious freedom. In order to fully inform the President
of the position of this group of attorneys, we have enclosed an analysis
of the issue by William Ball, along with a briefing memo. It is our hope
that a meeting can be arranged in the near future at the President's
convenience.
Sincerely
William L. Armstrong, U.S.S.
Jesse Helms
Helms, U.S.S.
strom Thurmond
Strom Thurmond, U.S.S.
Attachments sent
WITHDRAWAL SHEET
Ronald Reagan Library
Collection Name
Withdrawer
BLACKWELL, MORTON: FILES
RB 6/22/2011
W
File Folder
FOIA
INTERNAL REVENUE SERVICE CHURCH AUDITING
F06-0055/07
BRIEFING (1 OF 3)
POTTER, CLAIRE
Box Number
36
40
DOC Document Type
No of Doc Date Restric-
NO Document Description
pages
tions
1 PAPER
1
ND
B6
RE. PRESIDENTIAL BRIEFING [PG. 1]
Freedom of Information Act - [5 U.S.C. 552(b)]
B-1 National security classified information [(b)(1) of the FOIA]
B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA]
B-3 Release would violate a Federal statute [(b)(3) of the FOIA]
B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA]
B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA]
B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA]
B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA]
B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of gift.
Background and History
The two school associations to be represented at this meeting have
more than twenty-four hundred member schools throughout the entire
United States with a total enrollment of approximately 500,000
students. The church affiliation of these schools covers a wide
range of denominations within the evangelical and fundamentalist
church community.
While this particular constituency is quite friendly to the Adminis-
tration, it should be noted that the senators requesting this
meeting feel quite strongly that there is significant and overriding
merit to the position that is being taken which advocates that
IRS get out of the public policy enforcement game and return to
its statutory duty of collecting taxes.
William B. Ball was graduated from Notre Dame Law school in
1948. He is noted nationwide as a prominent constitutional
lawyer and is frequently called as a speaker at religious and
legal symposiums. He has been lead counsel in constitutional
litigation in 20 states and in 19 cases before the United States
Supreme Court, including as winning counsel in the landmark
decision in the Amish case, Wisconsin VS. Yoder. He has
lectured and debated constitutional law issues at the University
of Minnesota, University of Chicago, Amherst College, Harvard
Graduate School of Education, University of Pennsylvania and many
others and has published numerous articles in law reviews and other
legal periodicals.
Requested White House Action
The group would request a plenary and objective review of the
IRS campaign which has systematically crusaded against conservative
church schools and other religious organizations to the end that
a new policy could be developed which would restrict IRS monitoring
and regulating church schools SO that any such review would be con-
sistent with specific Congressional authority and will be consistent
with the United State Constitution. (See attached legal opinion).
Proposed Agenda
Senator Jess Helms to introduce the participants
Statement by President Reagan with regard to present administra-
tion policy
Statement by William Ball onvconstitutional dilemma
Comments by senators
Reaction by President Reagan and staff
Further discussion if needed
p.o. box 2069,
Oak Park, Illinois 60303
(312) 848 6335
CHRISTIAN
LEGAL
SOCIETY
March 31, 1981
Mr. William Ball
Ball & Skelly
Post Office Box 1108
Harrisburg, Pennsylvania 17108
Dear Mr. Ball:
The Center for Law and Religious Freedom has received nu-
merous inquiries regarding the scope and nature of Inter-
nal Revenue Service policies and practices which appear
to embody attempts to enforce certain social policies or
"public policy". Though these inquiries have been received
over the last couple of years, they seem to have become
more frequent perhaps with publicity given to the Bob Jones
University case and Green V. Miller.
I'm sure you would agree with us that the use of such tax
power raises numerous constitutional questions and is of
great concern to large segments of the public, perhaps the
religious community especially. Many who may even concur
with the goals espoused through such regulatory activity,
still have great concerns about the legitimacy of this ap-
proach.
It would greatly assist the set up for the Law and Religious
Freedom in its own attempt to analyze these issues and to
provide effective leadership if an analysis of this issue
from a legal and constitutional perspective could be made
available. We understand that you have some significant
involvement in issues of this sort and because of this and
your long standing commitment to religious liberty and the
defense of the same through the legal process, we would in-
vite you to prepare an opinion regarding these matters and
make it available to the Center for Law and Religious Free-
dom. This will assist in providing a principled approach to
these issues rather than merely dealing with isolated cases
as they emerge in various courts.
We appreciate your consideration of this request.
Executive Director
Center For Law & Religious Freedom
LRB:sd
BALL & SKELLY
ATTORNEYS AT LAW
511 N. SECOND STREET
P.O. BOX 1108
HARRISBURG. PENNSYLVANIA 17108
WILLIAM BENTLEY BALL
TELEPHONE
JOSEPH G. SKELLY
AREA CODE 717
PHILIP J. MURREN
232-6731
RICHARD E. CONNELL
KATHLEEN A. O'MALLEY
April 15, 1981
TO:
Mr. Lynn R. Buzzard
Executive Director
Center For Law and Religious Freedom
RE:
Unconstitutional Intervention of
IRS In Religious Affairs
Introduction
I write you today pursuant to your request for an
opinion from me, as a Fellow of the Center and as a constitut-
ional lawyer, respecting concerns, which you find to be
widespread, over activities of the Internal Revenue Service
in relation to churches and religious ministeries. The follow-
ing brief summary will confirm those concerns and will point
to the fact that I.R.S. has been engaging in activity which
directly violates constitutional guarantees.
Preliminarily, it is important for the Center to under-
stand: the aberrant activity of I.R.S. cannot be overcome
through litigations brought by religious groups. The burdens
are far too great too great in terms of cost, delay,
publicity and morale. American religious bodies are, by
and large, engaged in peaceable and beneficent works such
as worship, evangelization, education, sepulture, and care
of the aged, children, the poor and the ill. Most are not
governmentally funded and refuse to be. Their very limited
funds are held in strict stewardship for their religious
ministries. They cannot maintain litigation budgets. It
is not their business to be in the courts. It is a great
irony, that churches - which are the very core of law-abiding
good citizenship in our nation should have forced upon
them the image of public resisters to government. And doubt-
less you are well aware that litigations with government
are very threatening to religious institutions - for example,
colleges - which, when their existence is endangered by
government, may face rapid loss of support, memberships
or enrollments.
Tax exemption is the lifeline of religious institutions
in our country. The I.R.S., over the past few years, with
the sanction, if not the encourgement, of past national
administrations, has repeatedly adopted policies which would
cut off that lifeline. After long study of these policies,
I must conclude:
1.
The I.R.S. policies are absolutely out-
side any powers given I.R.S. by the Con-
gress of the United States. Incredibly,
these policies, given the mantle of the
power and prestige of the Government, are
nothing but attempts by individual public
servants to laminate their personal
views onto other citizens.
2.
The I.R.S. policies are palpable viola-
tions of the civil rights of religious
bodies, particularly those freedoms pro-
tected by the Religion Clauses of the
First Amendment.
3.
The I.R.S. policies rest upon the false
presumption that the taxing power may be
used as an instrument for bringing about
social change - indeed, those forms of
social change which are the preferred
notions of those public servants who
have been allowed a free hand in manip-
ulating the tax power.
4.
The I.R.S. policies are correctable
at once by informed and forceful execu-
tive action.
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I thought it would be useful, first, to examine the
constitutional position of churches and their ministries
under decisions of the Supreme Court; next to discuss par-
ticular impositions of I.R.S. in light of constitutional
considerations and in respect to authorization, or lack
of it, under Section 501 (c) (3) of the Internal Revenue Code.
I. THE SUPREME COURT HAS HELD THAT
GOVERNMENT MAY NOT ENTANGLE ITSELF
IN CHURCH AFFAIRS NOR, EXCEPT IN
EXTREME CASES, IMPINGE UPON LIBERTIES
OF CHURCHES OR THEIR MINISTRIES
Two basic principles relating to religious ministries
have been emphatically stated by the Supreme Court of the
United States during the past decade:
(1) Government may not become excessively entangled
in the affairs of religious bodies; church-state separation
must be observed. That is the principle protected by the
Establishment Clause of the First Amendment. The relevant
Supreme Court decisions bar any substantial government in-
volvement in the affairs of churches or their ministries,
such as schools. In Walz V. Tax Commission, 397 U.S. 664
(1970) the Court warned against governmental involvements
which produce "a kind of continuing day-to-day relationship
which the policy of neutrality seeks to minimize" and the
entangling of "the state in details of administration" of
church affairs. In Lemon V. Kurtzman, 403 U.S. 602 (1971),
the Court laid it down flatly that government must not en-
tangle itself in the affairs of church-schools. In Catholic
Bishop of Chicago V. NLRB, 559 F. 2d 1112, aff'd., 440 U.S.
490 (1979), the Court expressed grave concern over the for-
bidden entanglements which would be involved were NLRB to
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exercise jurisdiction in Roman Catholic schools. All of
this, too, is of immense relevance with respect to recent
I.R.S. actions which have called for grossly unconstitutional
entanglement between I.R.S. and churches and religious minis-
tries.
(2) Churches, religious bodies, their staffs and mem-
bers may pursue the exercise of religion without governmental
restraint except where a "compelling state interest" dictates
restriction and then, only if no alternative means exists
for the realizing of that governmental interest. That is
the principle protected by the Free Exercise Clause of the
First Amendment. The relevant Supreme Court decisions show
that religious bodies and religious interests are treated,
under the Constitution, very differently from secular private
organizations and interests. See, e.g., Cantwell V. Con-
necticut, 310 U.S. 296 (1939), Sherbert V. Verner, 374 U.S.
398 (1963), Wisconsin v. Yoder, 406 U.S. 205 (1972) and
McDaniel v. Paty, 435 U.S. 618 (1978). That fact is one
of immense relevance in respect to recent I.R.S. actions
which have either held churches to restrictions related
to secular bodies or which have attempted to define the
religious mission of churches - a matter forbidden by such
decisions as Kedroff V. St. Nicholas Cathedral, 344 U.S.
94 (1952).
Of course, religious activity also enjoys protection
under other constitutional headings - e.g., the freedom
of speech, press and assembly provisions of the First Amend-
ment, rights of privacy implied in the Ninth Amendment,
the general protections of the Due Process Clause and of
the Equal Protection Clause. Primary focus here will be
given to the Religion Clauses of the First Amendment.
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II. I.R.S. HAS VIOLATED, AND CONTINUES
AT THIS HOUR TO VIOLATE, CONSTITUTIONAL
LIBERTIES OF CHURCHES AND THEIR MIN-
ISTRIES
VOTER EDUCATION COMMUNICATIONS. (Revenue Ruling 78-
248, June 2, 1978.) This ruling by I.R.S. (upon which tax
exemption depends) raises a presumption that "single issue"
voter communications "widely distributed among the elector-
ate during an election campaign" constitute, by their very
nature, "participation or intervention in a political cam-
paign" (contrary to the provisions of Section 501 (c) (3)
of the Internal Revenue Code). The ruling forbids religious
groups to send questionnaires to political candidates, for
use during a campaign, which questions "evidence a bias
on certain issues." I.R.S. does not explain the term, "bias",
and I.R.S. reserves to itself the determination of what
constitutes "bias". The ruling is so broad that it would
plainly apply even to a homily wherein a clergyman would
explain to his own parishioners, within the walls of his
own church, the evil of voting for a candidate who, for
example, had won a mass following by preaching revolution,
or racial hatred, the legalization of prostitution, or any
other issue having grave moral significance.
Here is a flagrant violation of civil liberties but,
in particular, it is a bar to the exercise of rights of
religious bodies in bearing moral witness in our society.
Violation of this ruling means the cut-off of the lifeline
of tax exemption. The ruling is in no sense a reasonable
implication of the wording of Section 501 (c) (3), as prior
I.R.S. conduct so well indicates. Only in June, 1978, nine
years after Section 501 (c) (3) had been enacted, did I.R.S.
express this singular interpretation of the statute. Indeed
in an earlier Revenue Ruling, 66-256, the Service had stated
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that, as to a tax-exempt organization which addresses itself
to political issues, its only responsibility is to
bring the views expressed to the attention of the community."
The Supreme Court in Buckley V. Valeo, 424 U.S. 1, 14
(1976) laid down the governing principle:
"Discussion of public issues and de-
bate on the qualification of candidates
are integral to the operation of the
system of government established by our
Constitution. The First Amendment af-
fords the broadest protection to such
political expression in order 'to assure
[the] unfettered interchange of ideas
for the bringing about of political and
social change desired by the people'. "
This principle is extremely significant to churches.
Historically the liberty of churches in the United States
has included the bearing of witness on issues deemed moral.
Characteristically, these issues have come into focus as
"single" issues, as so many instances in our history will
show - e.g., the Abolitionist movement, National Prohibition,
the Vietnam War.
PRIVATE SCHOOLS' TAX-EXEMPT STATUS. (Proposed Revenue
Procedure on Tax-Exempt Status of Private Schools, 1978,
and see Orders of the U.S. District Court for the District
of Columbia, May 5, June 2, 1980, in Green V. Miller, Civil
Action No. 69-1355.) In its Proposed Revenue Procedure,
I.R.S. held that any private school formed or substantially
expanded in the wake of a federal court desegregation decree,
was presumptively racially discriminatory and must hence
lose its tax exemption. This incredible judgment was, on
its face, a denial of due process. To churches having re-
ligious schools, the blow was extremely damaging, since
it threatened the very slender resources out of which these
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ministries to youth are maintained. Yet an even more repre-
hensible feature was involved in the I.R.S. proposal: a
church-school could overcome the scandalous and unproved
presumption of racial discrimination by allowing I.R.S.
to program its ministry - that is to say, its curriculum,
staffing, student life, admissions policy, and recruitment.
For example, Section 4 of the proposal called for the church-
school to engage in "active and vigorous" minority recruit-
ment programs. Apart from the total unconstitutionality
of government's pressuring private, non-tax-supported re-
ligious institutions to engage in recruiting programs, is
the fact that government has no right to pressure these
institutions to pay, out of their limited funds, for a
non-Congressionally authorized social program. Again, through
the use of accordion-like terminology such as "active and
vigorous" (with which the whole proposal was rife), I.R.S.
administrators were made the legally uncontrolled judges
of the evidence respecting recruiting. Finally, I.R.S.'s
general unfamiliarity with the churches it sought to regulate
was made crystal clear here: Christian schools, for example,
do not "recruit", they evangelize and evangelization may
not be governmentally required under the Establishment Clause
of the First Amendment.
The myriad provisions of the Proposed Revenue Procedure
reflect:
a. Lack of Congressional authorization. The provisions
are nothing but expressions of the personal biases of non-
elected I.R.S. officials. The proposals are simply their
"home made" law.
b. Unconstitutional delegation of legislative power.
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The whole scheme is made to depend on language containing
no tangible standards for the exercise of I.R.S. discretion.
It is an open invitation to a reckless wielding of power
by I.R.S. public servants and to corrupt bargains of compli-
ance to be made by private school administrators frightened
over the prospect of economic shut-down.
C. Excessive entanglements between government and
church ministries. Part and parcel of the proposal is un-
limited inquisitorial power. Every species of entanglement
already condemned by the Supreme Court is written into the
Proposed Revenue Procedure.
The Congress reacted to the I.R.S. proposal through
the Ashbrook and Dornan Amendments. These dictates of the
Congress have now been circumvented by the U.S. District
Court for the District of Columbia, aided, one is forced
to conclude, by the Internal Revenue Service.
The case is Green V. Regan , an earlier desegregation
case in which civil rights plaintiffs sued I.R.S. and got
a court ruling that private non-religious schools must lose
tax exemption if racially discriminatory. Religious schools,
with their many constitutionally distinctive characteristics
reviewed in cases such as Lemon V. Kurtzman, were not parties
in this case and their claims and rights were never lit-
igated. In 1976 the plaintiffs sought to reopen the Green
decree and to broaden it.* Remarkably, the demanded broadening
*
The case was at that time entitled Green V. Miller.
- 8 -
was to consist of the very Proposed Revenue Procedure which
the Congress had just forbidden to be funded. Without op-
position from the defendant I.R.S., Judge Hart, of the
District Court, granted the decree sought and expressly
included religious schools as bound by it. Immediately upon
hearing of this, religious schools sought intervention in
the case. At this critical juncture, it was the plain duty
of I.R.S. to support the intervention if only because a
new, unlitigated element (the religious interest) was now
made part of the case. The public interest lay in assuring
that this element would be litigated and the risk of public
expense through remand obviated. Instead, I.R.S. stood silent,
and the court, in the face of that, at once denied interven-
tion. The conduct of I.R.S., in this phase of the Green
case, caused wide comment that the action had now become
a "sweetheart suit" - that, in other words, the conduct
of I.R.S. has been unethical. It is plainly a further express-
ion of I.R.S. bias, of I.R.S.'s lawlessness, and of its
*
blindness to religious liberty.
INTEGRATED AUXILIARIES OF CHURCHES. (Income Tax Regula-
tions §1.6033(g) January 4, 1977). The Internal Revenue
Code provides that an "integrated auxiliary of a church"
enjoys the same tax exempt status as a church. In 1977,
after Section 501 (c) (3) had long been administered, I.R.S.
published a regulation which provided a novel definition
*
The religious schools in question have appealed the
denial of intervention to the U.S. Court of Appeals
for the District of Columbia. The Department of Justice,
which had told the District Court that Treasury and
I.R.S. took "no position" on the intervention, on
April 1, 1981, informed the Court of Appeals that
they had "no objection to an order permitting the
appellants to intervene in this proceeding." This
is still far from what justice and the sound admin-
istration of the tax laws demand.
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of "integrated auxiliary". Stating that annual returns are
not required to be filed by churches, or their integrated
auxiliaries "whose principal activity is exclusively re-
ligious", the regulation went on to say:
"An organization's principal ac-
tivity will not be considered to be ex-
clusively religious if that activity is
educational, literary, charitable, or
of another nature (other than religious)
that would serve as a basis for exemp-
tion under section 501 (c) (3) "
The regulation goes on to supply a number of examples of
what the administrators of I.R.S. consider to be "exclusively
religious" activities.
The definition of "integrated auxiliary" supplied
by I.R.S. is flatly unconstitutional and in direct conflict
with teachings of the Supreme Court and several lower federal
courts. It rests upon secularist assumptions relating to
the nature of churches, religious ministries, and religion
itself. These assumptions attempt to legally confine religion
to worship, the "religion of sacristy and steeple." Precisely
such regulation existed in Germany under the Kulturkampf
of Bismarck, and has characterized the Nazi and Communist
regimes. It is utterly foreign to the American constitutional
tradition which recognizes that religious liberty embraces
such spacious concepts as moral, social and political wit-
ness, evangelization, education, care of the sick and the
poor. The I.R.S., in its regulation, states that, because
a church school's program "corresponds with the public school
program for the same grades and complies with State law
- 10 -
requirements for public education", that school's activity
is therefore not "exclusively religious". In Lemon V. Kurtz-
man, supra, the Supreme Court held precisely the opposite.
There the Commonwealth of Pennsylvania had claimed that
the "secular functions" of religious schools in Pennsylvania
could be publicly aided. The Supreme Court held that these
schools' activities could not be split into "secular" and
"religious" functions. The schools, it held, were "an integ-
ral part of the religious mission" of their sponsoring
churches.
I.R.S. has continued to aggressively pursue this un-
lawful policy of making its own judgments upon doctrine
and belief.
III. THE I.R.S.'S RELIANCE UPON "PUBLIC
POLICY" AS ITS JUSTIFICATION FOR MAN-
IPULATING TAX POWERS FOR SOCIAL CONTROL
IS ESPECIALLY DANGEROUS
Perhaps no aspect of I.R.S. activity in recent years
needs public exposure and condemnation so much as its persis-
tent use of the term "public policy" as the basis for its
impositions. The powers of a federal administrative agency
are lodged in but one source: the Congress. Unhappily,
I.R.S., like many another federal agency, has been allowed
- without Congressional or executive reproof - to get into
the habit of making its own law. The tax power is, of course,
a governmental power which it is supremely important be
kept to the letter of the law as made by the people's repre-
sentatives. To allow administrative agents to make law is
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utterly alien to the American concept of government. The
present prevalence of abuse of power by administrative
agencies lends not the slightest legitimacy to that abuse.
What we see in those abuses (and nowhere worse than in the
conduct of I.R.S. to which I have referred above) is actually
the embracing of the old European "reason of state" doctrine
- the notion that the king could violate the common law
for ends the king deemed important. In our day this doctrine
has been the staple of totalitarian nations' jurisprudence.
Avoiding constitutional commands and principles, I.R.S.
has relied insistently on that doctrine - which it expresses
through its use of the term, "public policy". "Public
policy", says I.R.S., dictates particular I.R.S. regulations;
citizens must mold their conduct to conform to what the
I.R.S. public servants choose to denominate as "public
policy"; whatever the latter individuals select as "public
policy" shall be, in effect, the law of the land - preempting
the true law of the land. Note, for example, the following
from I.R.S. Publication 557, HOW TO APPLY FOR AND RETAIN
EXEMPT STATUS FOR YOUR ORGANIZATION (1979):
"In order to determine whether
recognition of exemption should appro-
priately be extended to an organization
seeking to meet the religious purposes
test of section 501 (c) (3) of the Code,
the Internal Revenue Service maintains
two basic guidelines:
1) That the particular belief of the
organization is truly and sincerely held;
and
2) That the practices and rituals asso-
ciated with the organization's belief or
creed are not illegal or contrary to
clearly defined public policy.
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Hence, your group (or organization) may
not qualify for treatment as an exempt
religious organization for tax purposes
if its actions, as contrasted with its
beliefs, are contrary to well established
and clearly defined public policy. If
there is a clear showing that the beliefs
(or doctrines) are sincerely held by
those professing them, the Internal
Revenue Service will not question the
religious nature of those beliefs."
(Emphasis supplied.)
I must repeat my concern that I.R.S. has not been
content merely to make pronouncements about "public policy";
instead it has aggressively pursued this concept in litiga-
tion. The case presently in the courts, Bob Jones University
V. United States of America, 468 F. Supp. 890 (D.C., S.C.,
1978) (now on appeal in the Fourth Circuit), is a disturbing
illustration of this. There I.R.S., not venturing to contra-
dict the sincerity and reality of a college's religious
claims, nevertheless contends that these claims must be
overridden in the name of I.R.S. -invented "public policy"
on race discrimination. That contention is so far-reaching
as to have invited the concerns even of religious groups
not remotely connected with Bob Jones University or even
with higher education - e.g., the Catholic Hospital Associa-
tion, a nationwide Roman Catholic body, took specific note
of the implications of this case as to sex discrimination.
In its newsletter of February, 1981, the CHA stated: "This
case has impact upon entities such as the Catholic Church
which requires a celibate, all-male clergy."
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SOME CONCLUSIONS
I am sure that attorneys and religious leaders through-
out the country are pleased that the Center is interested
in the issues which my memorandum to you raises. The Center
may desire, however, also to know what recommendations can
be made for the resolution of these issues.
It is clear that two courses of action must be pursued
and that the administration of President Reagan alone can
carry out those courses of action. Nothing else will save
a daily worsening situation, and action is needed at once.
The first course of action is to immediately place
executive restraints on the Service. Clearly, immediate
revision of regulations, rulings and procedures which violate
First Amendment liberties of religion is called for. That
revision could be drafted within a period of six months,
and meanwhile a moratorium should be placed on all enforce-
ment of present regulation illegally affecting religious
bodies. Doubtless, too, executive action should include
removal from office of those individuals who have been the
promoters of I.R.S. lawlessness.
The second (but simultaneous course of action) is
to call for an immediate change of position in ongoing litiga-
tions. Two cases come immediately to mind, the aforementioned
Green V. Regan and Bob Jones University cases.
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Thank you for taking time to absorb this rather lengthy
memorandum. It represents, as you know, the concerns of
a great number of people in our beloved country.
Willum blace
William B. Ball
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