Yesterday, a federal appeals court upheld the

Internal Revenue
decision to revoke the tax-exempt status of a church that had paid for newspaper ads against then-presidential candidate Bill Clinton in 1992.

The revocation is the first in the history of the IRS and serves as a warning from the federal judiciary that churches may not fund partisan activity. U.S. law granting tax-exempt status also forbids tax-exempt organizations from involvement in “any political campaign on behalf of (or in opposition to) any candidate for public office.”

The Landmark Church,
formerly know as the Church at Pierce Creek, in Binghamton, N.Y., requested and received tax-exempt status from the IRS in 1983. But on Oct. 30, 1992, just four days before the presidential election, the church placed full-page ads in USA Today and the Washington Times warning Christians about Clinton.

Pastor Dan Little of the Church at Pierce Creek

The ads’ headline, “Christians Beware,” was followed by a statement that Clinton’s positions concerning abortion, homosexuality and the distribution of condoms to teen-agers in schools violate biblical principals.

A notice at the bottom of the ad appealed for “tax-exempt donations” to pay for placing the ad.

“The advertisements did not go unnoticed,” the appeals court said. “They produced hundreds of contributions to the church from across the country and were mentioned in a New York Times article and an Anthony Lewis column which stated that the sponsors of the advertisement had almost certainly violated the Internal Revenue Code.

“The advertisements also came to the attention of the regional commissioner of the IRS,” the court said, “who notified the church on Nov. 20, 1992, that he had authorized a church tax inquiry based on ‘a reasonable belief … that you may not be tax-exempt or that you may be liable for tax’ due to political activities and expenditures.”

The church had “two unproductive meetings between the parties,” according to court documents, before its tax-exempt status was revoked in 1995.

Pastor Dan Little challenged the revocation, saying the IRS had acted without authority and had violated the First Amendment’s guarantee of freedom of religion, according to United Press International. The church also alleged it was being unconstitutionally singled out by the IRS for “selective prosecution.”

Lawyers for the church argued that the Internal Revenue Code gave the IRS the authority to revoke tax-exempt status of a “religious organization,” but not that of “a bona fide church.”

A federal judge rejected the argument — as did the appeals court panel on Friday.

“We find this argument more creative than persuasive,” the panel’s opinion said. “The simple answer, of course, is that whereas not every religious organization is a church, every church is a religious organization. More to the point, irrespective of whether it was required to do so, the church applied to the IRS for an advance determination of its tax-exempt status. The IRS granted that recognition and now seeks to withdraw it. (Federal law) gives the IRS this power.”

The panel also rejected the church’s First Amendment and selective prosecution argument. The judges conceded in their Friday opinion that the church could form a political action committee but added that the PAC would have to be separately incorporated and could not be supported by church funds.

“This decision slams the door on mixing religion and partisan politics,” said the Rev. Barry W. Lynn, executive director of

Americans United for Separation of Church and State,
which says it reported the church to the IRS. “This is a staggering defeat for Pat Robertson, Jerry Falwell and others who want to convert America’s churches into a partisan political machine.”

“This is an extraordinarily important ruling,” he continued. “All over the country, Religious Right figures like Robertson, Falwell and others are trying to lure churches into jumping headfirst into politics. This decision should bring those efforts to a grinding halt.”

“Robertson’s attorneys have been telling churches for years that they can get involved in electioneering without worry,” Lynn added. “Quite simply, this decision proves that they don’t know what they are talking about. From now on, all religious leaders should look at Robertson’s advice in this area with extreme skepticism.”

But attorneys for the Church at Pierce Creek said the ruling sets a valuable precedent by its mention of religiously affiliated political action committees.

“While we are disappointed with the appellate court’s decision concerning the case involving the Church at Pierce Creek, we are encouraged that this court appears to provide a blueprint for churches to express their beliefs in a political context,” said Jay Sekulow, chief counsel of the

American Center for Law and Justice.
“This is an important decision that will set the legal tone for future involvement of churches in the political arena.”

Attorney Jay Sekulow of ACLJ believes the court’s ruling created a “blueprint” for churches’ political involvement.

According to the court’s decision, the church may also reapply for tax-exempt status as long as it does not engage in campaign speech regarding a particular candidate. And, it does not have to pay taxes on donations given to the church despite the fact that its tax-exempt status had been previously revoked.

“This is an important development in the area of protecting the First Amendment rights by clearly outlining the avenues available for churches to participate in the political process,” Sekulow added.

Friday’s ruling could be appealed to the full

U.S. Court of
Appeals for the District of Columbia Circuit,
or the church could ask the Supreme Court for review. The American Center for Law and Justice said its client has not yet decided what further action it will take.

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