[CS-FSLUG] BARRY LYNN IS TRYING TO SCARE CHURCHES ... AGAIN

[Fred Miller]

Falwell Confidential

Date: July 21, 2004
From: Jerry Falwell

BARRY LYNN IS TRYING TO SCARE CHURCHES ... AGAIN

The leftist organization Americans United for Separation of Church and State
(AU) has called for the Internal Revenue Service to revoke the tax exempt
status of my church and ministry because of the content of a recent "Falwell
Confidential" I wrote in which I suggested that President Bush was the
candidate of choice for conservative Christians.

Barry Lynn, the former American Civil Liberties Union operative, now heads
AU.  You have heard me refer to AU as a "surrogate of the Democratic
National Committee" (DNC).  My son, Jerry Jr., Liberty University's
vice-chancellor and general counsel, has suggested that Mr. Lynn rename his
organization Americans United for Separation of Conservative Churches and
State.

Mr. Lynn, like Jesse Jackson and Al Sharpton, for the purpose of seeking
respectability in the media, likes to use the title "reverend," even though
I have been unable to find the name and location of any church he has ever
pastored, or the location and time where he ever delivered an actual sermon.

A couple of years ago while debating Mr. Lynn on a national TV talk show, I
accused him of being an attack dog for the DNC and asked him why he never
challenged Rev. Jackson, Rev. Sharpton, Bill Clinton, Al Gore and other
liberals for brazenly campaigning in African-American churches.  As a
result, Mr. Lynn has since written some complaint letters to the IRS
regarding such situations for the express purpose, in my opinion, of leaving
an impression of impartiality.

FRIGHT LETTERS TO CHURCHES ARE COMING

About this time each election year, AU sends  what I term a "fright letter"
to thousands of conservative evangelical pastors, telling them - quite
incorrectly - that any use of voter guides, political discourse or other
such activity could result in a loss of tax-exempt status for their
churches.

However, no such letter is sent to African-American churches or to liberal
main-line denominational churches.  Traditionally, the Democratic candidates
speak in many African-American churches during their presidential campaigns.

Last Sunday, July 18, Sen. John Edwards spoke in the pulpit of the St. Mark
AME Church in Orlando.  As reported in wire stories and on NBC Nightly News,
the pastor of the church strongly endorsed the Kerry-Edwards ticket.  As
also shown on this same NBC broadcast, Sen. John Kerry, on April 4, spoke in
a large African-American church where the pastor introduced him as "the next
President of the United States."

Bill Clinton and Al Gore routinely conducted similar church-based
campaigning.

Mr. Kerry and Mr. Edwards will certainly follow this tradition right up to
election time.  I have been documenting this "church activity on the left"
for many years.  Neither AU nor the so-called "mainstream media" have
expressed any outrage over this seeming violation of IRS tax regulations.
This glaring and gross hypocrisy is obvious to all but those who are blinded
by their leftist biases.

WE HAVE VIOLATED NO LAWS OR REGULATIONS

By the way, this Falwell Confidential weekly newsletter is owned and
sponsored by the Liberty Alliance.  The Liberty Alliance is a not-for-profit
educational and lobbying organization.  It is an IRS recognized 501(c)(4)
corporation, chartered in Washington, D.C., that is allowed to lobby
Congress and influence legislation.

Our goal at Liberty Alliance is to promote traditional family values and
battle the liberals who would attempt to destroy the godly principles that
were at the foundation of this nation.

We still hold to the four main tenets of the original Moral Majority as it
was established in 1979.  We are: 1) pro-family, 2) pro-life, 3) pro-defense
and, 4) pro-Israel.  Gifts to The Liberty Alliance are, by law, not
tax-deductible.

Further, my web site, http://www.falwell.com, is also sponsored by The
Liberty Alliance. Neither my Thomas Road Baptist Church, Jerry Falwell
Ministries nor Liberty University have any affiliation with the Liberty
Alliance.  As a publisher of a weekly newsletter (
http://www.nljonline.com ) and a monthly newspaper and a tax-paying citizen,
I may legally, under First Amendment protection, express my views and
opinions just like Rev. Jackson, Rev. Sharpton and "Rev." Lynn.

NO CHURCH HAS EVER LOST ITS TAX-EXEMPT STATUS

Every American pastor, as a tax-paying citizen, is free to express his views
and opinions.  I continually urge pastors who receive the traditional Barry
Lynn "scare letter" to simply ignore it. America needs your voice!

The Church at Pierce Creek in Binghamton, N.Y., had its "IRS letter" pulled
for one day a few years ago.  For the full story on this single instance in
American history where a church's tax exemption was challenged, I am, by
permission, reprinting an article by Mat Staver, general counsel and
president of the Orlando, Fla.-based Liberty Counsel, a law firm of several
hundred attorneys that defends the constitutional rights of churches and
Christians.  It appears below.

In the meantime, pastors, continue to speak the truth from your pulpits.
Don't let any inaccurate letters scare you away from urging your
congregations to political action.

CHURCH'S LOSS OF TAX-EXEMPT STATUS LETTER TURNS OUT TO BE A VICTORY FOR
CHURCHES

by Mathew D. Staver

Founder, President and General Counsel
Liberty Counsel, Orlando, FL
http://www.lc.org

On May 12, 2000, the Federal Court of Appeals for the District of Columbia
sided with the IRS' decision to revoke a tax-exempt letter ruling from the
Church at Pierce Creek located in Binghamton, NY. However, the Court ruling
shows that the IRS has very little authority over churches. (1) The ruling
underscores the fact that churches do not need to fear the loss of their
tax-exempt status.

The case began on October 30, 1992, four days before the presidential
election, when the Church at Pierce Creek placed full-page advertisements in
USA Today and the Washington Times. Each ad bore the headline "Christians
Beware" and pointed out that then-Governor Bill Clinton had extreme views
regarding abortion and homosexuality. The advertisement clearly noted that
it was sponsored by the Church and its pastor and furthermore solicited "tax
deductible donations" for the advertisement. The ads then gave the Church's
address. As a result, the Church received hundreds of contributions.

On November 20, 1992, the IRS notified the Church that it intended to
conduct an inquiry as to whether the Church was operating as a tax-exempt
organization. After negotiations failed, the IRS revoked the Church's
tax-exempt letter ruling and the Church filed suit.

The Court pointed out that under the Internal Revenue Code, churches are the
only institutions that are not required to apply for tax-exempt status.
Churches, by their very nature, are considered tax-exempt. (2) While
churches may ask the IRS for an advance letter ruling, churches are not
required to do so. If a church does not seek a letter ruling, a donor's
contributions are still tax deductible. In the event of an audit, the donor
must prove that the church is operating like a tax-exempt organization and
following the requirements of IRS Code 501(c)(3), which includes a
prohibition on endorsing or opposing a candidate for political office. If a
letter ruling is in place, the donor simply points to the letter ruling on
file with the IRS.

The Church at Pierce Creek had applied for and received a letter ruling. The
IRS simply revoked the letter ruling and the Church sued to get it back. The
Court noted that "because of the unique treatment churches receive under the
Internal Revenue Code, the impact of the revocation is likely to be more
symbolic than substantial."

Indeed, the tax-exempt letter revocation is only symbolic and not
substantive. During the oral argument, counsel for the IRS confirmed that if
the Church chose not to intervene in future political campaigns, it may hold
itself out as a 501(c)(3) organization and receive all of the benefits of
that status. The Court wrote: "All that will have been lost is the advance
assurance of deductibility in the event a donor should be audited."

(3) The Court also pointed out that revocation of the letter ruling does not
make the Church liable for the payment of taxes. (4) As the IRS conceded
during oral argument, "the revocation of the exemption does not convert bona
fide donations into income taxable to the Church." (5) The Court also noted
that it knew of no authority "to prevent the Church from reapplying for a
prospective determination of its tax-exempt status and regaining the advance
assurance of deductibility - provided, of course, that it renounces future
involvement in political campaigns."

(6) So what is the impact of this ruling? It's certainly not as Barry Lynn,
of the Americans United for Separation of Church and State, declared by
saying the ruling was a "staggering defeat for Pat Robertson, Jerry Falwell
and others who want to convert America's churches into a partisan political
machine." Indeed, this ruling actually helps Pat Robertson and Dr. Jerry
Falwell.

Understand that the only thing the Church lost in this case is its advance
tax-exempt letter ruling. Contributions given prior to the revocation of the
IRS letter are still deductible and are not taxable to the Church. After the
letter ruling was revoked, the Church could continue as a church, continue
receiving donations, and donors could continue to claim deductions on their
income tax return, provided that the Church did not continue to endorse or
oppose candidates. If the Church wants an advance letter ruling at some
point in the future, it is free to ask for another one. Obviously in the
case of the presidential election, the Church could easily cease endorsing
or opposing a candidate since the election had transpired.

Either the Church was naive, or it sought to pick a fight with the IRS. The
case included several hundred pages of newspaper articles where other
churches had invited candidates to speak in services where the IRS did
nothing. The Church at Pierce Creek sought to make headlines when it took
out full-page ads in USA Today and the Washington Times. The Church then
clearly identified itself and requested contributions.  This is the first
case in history where a church has ever lost its tax-exempt letter ruling.
It is the most outrageous set of facts, because the full-page ads
essentially put a target in the church's front yard.  Absent these
outrageous facts, no church has ever lost its tax-exempt status.

Moreover, even with these facts begging for a fight with the IRS, the case
shows the IRS has almost no teeth.  A church can give up the tax-exempt
letter ruling, and continue on after that date so long as it doesn't
actively endorse or oppose a candidate.  A church can then apply for another
letter ruling at some point in the future if it chooses to do so.  In this
way, the church can continue on with its activity with virtually no
interruption.

The IRS regulations are clear that, while churches may not endorse or oppose
a candidate for political office, churches may educate about the candidates'
viewpoints. Education can take the form of sermons, forums, debates, or
voter guides. The church may educate about its doctrinal positions that are
relevant to the political races. Education is perfectly permissible for a
501(c)(3) organization. Moreover, churches can engage in lobbying for or
against legislation so long as churches do not devote more than a
substantial part of their overall activity toward lobbying efforts.  Indeed,
no church has ever lost its tax-exempt status for engaging in too much
lobbying.

Despite the huffing and puffing of groups like Americans United for
Separation of Church and State or People for the American Way, they are no
more powerful than the wolf blowing against the little pig's brick house.  I
am sure that these organizations will try to terrorize pastors into silence,
but everyone should know that, instead of a muzzle, this case is actually a
megaphone for churches.

-- 
"Ballmer is no more designed for the art of persuasion 
than the Abrams tank is for delivering meals on wheels."