WASHINGTON -- The Internal Revenue Service was justified in revoking the tax-exempt status of a small New York church that opposed President Clinton's 1992 candidacy, a federal appeals court ruled Friday.
The unanimous ruling said the revocation -- history's first stripping of a church's tax exemption for political activity -- "neither violated the Constitution nor exceeded the IRS's statutory authority."Lawyers for the Church at Pierce Creek, in the Binghamton, N.Y., area, had argued that the tax agency had exceeded its authority, violated the church's free-speech rights and engaged in selective prosecution.
"These objections are without merit," a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia concluded.
Federal tax law exempts churches and other charitable organizations from taxation provided they do not engage in certain activities, including any political campaign on behalf of or in opposition to any candidate for public office.
The Rev. Barry Lynn, executive director of Americans United for Separation of Church and State, said the ruling "slams the door on mixing religion and partisan politics."
"This is a staggering defeat for Pat Robertson, Jerry Falwell and others who want to convert America's churches into a partisan political machine," Lynn said. "In light of this ruling, pastors who allow partisan politicking in the sanctuary are jeopardizing their church's tax exemption."
It was the Friday before Election Day in 1992 when the Church at Pierce Creek and its pastor, Daniel J. Little, bought a full-page advertisement in two newspapers urging voters to reject Democratic presidential nominee Bill Clinton because of his positions on abortion, homosexuality and the distribution of condoms in public schools.
The "Christians Beware" ad appeared in USA Today and The Washington Times. Americans United for Separation of Church and State subsequently filed a complaint with the IRS.
After an investigation, the IRS revoked the church's tax-exempt status in 1995, action held in abeyance during the legal fight. A federal judge upheld the revocation last year, and Friday's decision agreed with his reasoning.
The appeals court's decision focused most closely on the church's free-speech claims, but rejected them as exaggerated.
"The church asserts first, that a revocation would threaten its existence . . . that a loss of its tax-exempt status will not only make its members reluctant to contribute the funds essential to its survival but may obligate the church itself to pay taxes," Judge James Buckley wrote.
"As the IRS confirmed in oral argument, if the church does not intervene in future political campaigns it may hold itself out as a (tax-exempt) organization and receive all the benefits of that status," he said.
Buckley's opinion also noted that churches can form separate, non-exempt entities "for the promotion of social welfare," and that those organizations can form political action committees to participate in campaigns.
The New York church is represented by the Robertson-founded American Center for Law and Justice.
"While we are disappointed with 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," the center's chief counsel, Jay Sekulow, said. "This is an important development in the area of protecting the First Amendment rights."
Sekulow said his group had not yet decided whether it will appeal the case to the Supreme Court.
The case is Branch Ministries vs. Rossotti, 99-5097.
On the Net: For the ruling: www.uscourts.govlinks.html and click on D.C. Circuit.