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Subpoena For Megachurch Records Turns On Technicality of IRS Bureaucracy

By Howard M. Friedman

The Minnesota Independent and the Minneapolis Star-Tribune report that on Thursday a federal magistrate judge in Minneapolis heard arguments on whether the court should enforce an IRS subpoena for financial documents against Living Word Christian Center. The IRS is investigating loans and compensation paid by the Brooklyn Park (MN) megachurch to its pastor, Mac Hammond. While broad church-state issues, and concerns about the privacy of donors, are at stake, this aspect of the case turns on technical language imposing special procedures for IRS investigations of churches.

Internal Revenue Code Sec. 7611 , enacted in 1969, among other things requires that a church tax inquiry can be commenced only if it is authorized by "an appropriate high-level Treasury official." The section defines that as an official "whose rank is no lower than that of a principal Internal Revenue officer for an internal revenue region." However, in 1998, the IRS was restructured so that regional commissioners were eliminated and instead a system of national directors for separate types of taxpayers was set up. In this case, the investigation was authorized by the director of exempt organization examinations -- a position that is fourth in line in the IRS organization chart. Living Word Church argues that Sec. 7611 requires a higher level official to approve the summons. (See prior related posting.)

Full post as published by Religion Clause on October 04, 2008 (boomark / email).