Grassley's Response to Copeland's Argument

My quick-and-dirty reaction to Senator Grassley's response to the arguments of Copeland Ministries is below the fold. 

Bottom lines:  I'm grateful that Senator Grassley is finally engaging in a public way on some of the specific church-state issues involved in this debate.  I think he makes some good points, and I believe him to have good motives.  But some of his answers leave important questions unaddressed and others remain unconvincing.  I also continue to have doubts about some of the other ways in which Senator Grassley is pursuing his goals.  Finally, this Q and A is as clear a signal as any we have had that Senator Grassley is considering making a serious push to change certain aspects of tax law as they relate to churches and other houses of worship.  Thus, while the investigation itself only specifically targets six ministries, many more ministries have a stake in the process Senator Grassley is directing.

The bolded text is drawn from Senator Grassley's remarks.  My response is in plain text below.

I believe strongly in the First Amendment protections for religious liberty. I was one of the champions of the Church Audit Procedures Act [CAPA] in 1983, which places a tremendous on burden the IRS to ensure that an audit is warranted. The IRS' role is to enforce the laws that are already on the books. It is the Senate Finance Committee's job to determine whether existing laws can be administered effectively and efficiently. This investigation is not about doctrine but about the ability to game the tax system precisely because of the ability to hide behind the First Amendment.

Grassley's articulation of the distinction between the job of the IRS and the job of the Senate Finance Committee is clear and makes sense.  My question/concern here does not have to do with that theoretical distinction.  Instead, it has to do with whether there is much actual difference in the way the Senate Finance Committee is functioning here and the way the IRS functions.  Senator Grassley appears to be asking questions that look very much like the kinds of questions the IRS sometimes asks particular churches.  When a legislator functions in ways that are similar to the way the IRS functions, and his inquiries involve churches, it would seem that the very same concerns that led Congress to believe that the protections of CAPA were necessary also are relevant here. Thus, the question stands:  When a legislator functions in much the way the IRS functions in this context, why should he be exempt from following rules similar to the ones Congress said the IRS must follow to protect religious freedom and church autonomy? 

Courts have upheld the application of the tax code to churches in numerous instances. (For background, you could talk to Mike Sanders, a well-respected exempt organizations attorney at Blank Rome and adjunct professor on exempt organization issues at Georgetown – testified at 1987 televangelist hearings, (202) 772-5808). Some argue that the special treatment provided to churches, such as the exemption from filing with the IRS, should be a violation of the First Amendment.

Yes, the tax code applies to churches.  But, wow, it's pretty interesting that Grassley just happens to mention the fact that "some argue" that the exemption for churches from filing with the IRS is a First Amendment violation.  For what it is worth, my rough take is that churches should be treated specially by the government on both sides of the coin; for example, the state should not be able to direct funds to them and they should receive some special treatment in the tax code.  Working together, both these things create a needed separation between church and state.  But, in any case, that sentence, plus some others in this Q and A, demonstrate that there is more at stake here than simply the fate of the ministries of the "Grassley Six." 

The six churches that I wrote to in November promulgate their doctrine in a highly visible manner – television, radio, Internet. As a result, they have drawn scrutiny from news organizations, members (former and current) of the churches, members of other churches and the general public at large. Given my work with tax-exempt organizations, it was only natural that people write to me about these churches.

Grassley makes this argument to say that he has no axe to grind against the theology of these ministries.  Viewed through this lense, I think his point has merit.  If these churches are the ones that are most visible and raise the most questions in terms of tax compliance, then it is understandable when the government looks to them first. (To understand this point better, it may help to consider a case involving a challenge to the IRS' removal of a church's status as a tax-exempt 501(c)(3) entity.  In this case, the church charged that it had been selectively targeted by the government.  The court rejected the argument.  Click on the link to see the way the court responded to this argument.)  As described elsewhere in this post, however, that does not mean that it was smart or sound for Grassley to target all of these ministries as a group in the way that he did.

When I wrote to these churches, I had no idea the ministers considered themselves "Pentecostal." I came to find out recently that one of these six may actually be a Baptist church. I didn't go about trying to figure out what each of them classified themselves as before I wrote to them. I wrote to them based on the concerns raised about their operations.

I give Grassley the benefit of the doubt on this one.  I believe his motives are good.  I simply question some of the ways in which he is carrying out this work.

I understand that some of my comments may be construed as targeting the doctrine of the prosperity gospel. This is another one of these arguments that are made by those with deep pockets – particularly the lawyers. My comments are no different from the comments I made in questioning the spending practices of leaders at other tax-exempt organizations: . . .

[For example, in another instance, I said:] "The report shows expenses that would make for a good episode of 'Lifestyles of the Rich and Famous' – a lifestyle paid for by AU students and their parents." (Letter to Chair and Vice-Chair of the Board of Directors of American University, May 17, 2006, as reported in The Washington Post, May 18, 2006, "Senator Questions School's Governance".)

I find this unconvincing.  I think Senator Grassley just needs to admit that he made a mistake here and apologize for it. 

To explain, I must go back to November 2007 when this all broke loose.  When Grassley announced these investigations in early November 2007, he said:

In a radio interview (see here), Grassley refers to the fact that he is a Christian.  He says,   "[a]s a Christian myself. . . . I think we expect the money to be used for the purpose of the mission . . . . "  And the Tampa Tribune reports that Senator Grassley said:

"I think for a person like me, it's this simple," Grassley told News Channel 8 on Tuesday. "Jesus came into the city on a simple donkey. To what extent do you need a Rolls-Royce to expand the ministry of Jesus Christ?"

I took issue with those comments then, and I do so now.  These talking points read like a government leader is using his official powers to target certain churches because he takes issue with their theology.  I said then: "I take a back seat to no one in terms of my criticism of the so-called 'prosperity gospel.'  But I don't want any branch or official of the government to try to evaluate the 'prosperity gospel' as a theological matter -- that is not the government's job."  Grassley made a mistake here, pure and simple.  He ought to apologize for it and vow to ensure that his work will not come anywhere close to scrutiny of any theological doctrine as such.  Unless other evidence emerges, however, I continue to give Grassley the benefit of the doubt about his motives.  I understand why these comments trouble people -- they obviously troubled me.  But this appears to me to be a dumb mistake made for the sake of a snappy talking point or two.  Good staff work might have avoided the error, which brings us to another point.

When Grassley made these comments, it strongly suggested to me that he did not have anyone on his staff who was thinking through the relevant church-state issues in a careful and comprehensive way.  Frankly, it just wasn't good enough to take the cookie-cutter they had been using vis-a-vis other nonprofits and use it here, and anyone with any church-state sensitivity would have told them so if they had asked.  I hope Senator Grassley has staffed up on these issues since then and reached out to some responsible church-state experts and groups for meaningful dialogue. 

Just because the Copelands have asked the IRS for an audit doesn't mean the IRS is going to do one. This action raises the question of whether this was done to mislead the public. The IRS can only enforce those laws that are already on the books. The Senate Finance Committee does not have the authority to impose and collect taxes – it has a much broader mandate of judging how the laws are working. For example, the IRS can only attempt to assess whether the benefits accruing to individuals from church assets such as the profits earned from related entities, personal use of church assets, and parsonage allowances are reasonable under Section 4958 of the code.

I am interested in whether the law should be changed, such as prohibiting tax-exempt organizations to compare themselves to for-profit corporations when determining reasonable compensation for their executives. Specifically, with respect to churches, I am interested in the lack of information reported to the IRS on transactions with related entities as well as activities overseas. These are things a regular charity has to report on its 990 but a church is exempt from filing. I also wonder whether it makes sense for ministers to completely exclude from income the parsonage and housing allowance they receive. When these exclusions were provided, I doubt that Congress contemplated that a minister would have multiple parsonages across the country and overseas or that a church would deem the majority of its employees "ministers" so that everyone could get these benefits. It is the role of Congress – not the IRS – to consider these questions.

It is certainly within the purview of Congress to explore these issues and to vote to change the law if it believes those changes are warranted.  (I'm not going to address these issues substantively right now.)  But I am not convinced that Senator Grassley had to pursue these issues by launching the investigation in the way that he did.  Couldn't he have accomplished the same goals by, for example, holding hearings to discuss the investigative reporting on these issues and hear testimony from the IRS, outside experts, and the like?  And wouldn't that have avoided the problems discussed here and elsewhere (the ones triggered by his investigation of the "Grassley Six")?  

One final note.  The remarks Grassley makes in this snippet are one more confirmation that this investigation ultimately could impact many more congregations than the ones currently under investigation.  Look for interest in this matter to continue to spiral.

Comments

[Manic Monday]

interesting read and I enjoyed the comments. I have to agree with you that Grassley could have obtained the information is some other way. And Copeland already had seen the bigger picture here - thus, his refusal to turn over all of the records Grassley requested. Like your last paragraph says, it's more apparent than ever that many could be affected by this situation.

[Still Looking]

The bottom line still comes down to the fact that NO one Senator should be given this kind of power. Copeland is doing us all a favor in the end, despite all of the criticism he is receiving.

[Tyler]

Melissa - you bring up some great points! Enjoyed the read and glad that Copeland is still standing his ground in this situation. While I am not a follower of his teachings, I am very much a supporter of his during this investigation. He has some valid arguments, and Grassley needs to just come to terms with his mistakes.

[Wilson]

Glad to see that there is someone else who is calling Grassley out on his mistakes. There is absolutely NO reason that one congressman should be allowed this kind of power. It's scary to think about what he could do next if given this kind of authority.

[LOVE Friday]

Grassley did make some mistakes, but will never correct them I am sure. I am still blown away by his statement that he didn't know the identities of the organizations he was investigating. When there is no evidence of wrongdoing, it just makes seem like Grassley is even more out of control...

[AFter Lunch]

The information Grassley requested makes you wonder what he may have planned to do with the information. The names, address, and other figures of anyone that had sang or shared Copeland's pulpit. Do I hear sounds of freedom of association issues creeping in on us?

[Steve Page]

I guess I don't understand what part of these scriptures you and the Copeland's don't understand. Or why you and the Copeland's are looking for legal loopholes in the Bible. Pharisees, all of you.

Romans 13:1 Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves.

1 Peter 2:13 Submit yourselves for the Lord's sake to every authority instituted among men: whether to the king, as the supreme authority, 14or to governors, who are sent by him to punish those who do wrong and to commend those who do right. 15For it is God's will that by doing good you should silence the ignorant talk of foolish men.

[BiggER]

There is a bigger picture here. If Grassley is given access to this information, what is next? There are procedures set in place to obtain the type of information he is requesting. Copeland believes that those should be followed. I will support Copeland during this investigation, although I am not a follower of his teachings. I am however, concerned about the future of our rights.

[Another Monday]

Melissa - you bring up some great points that no one else is bringing to the surface. I have to applaud you. Grassley is out of control and I am hoping that the right decision is made and he is put back in his place.

[Michele]

melissa - As time has passed and once again I come back to this wonderful blog you have posted, I am still thankful that you are sharing the other side of the story. It is still dragging on and I think that it's time to end it. The most recent nepotism angled attack is just more proof to me that GRassley has lost his footing and needs to just admit he messed up with this one and get back to some real work.

[luke]

I have to agree michele. It is nice to see that there were those telling the other side of the story as it was happening. I still can't believe there has not been a conclusion to this. It's past time, and it's obvious Grassley lost all ground he thought he had to stand on. I am glad Copeland stood strong throughout for ALL of us.