Today, the Becket Fund for Religious Liberty issued an official commentary on proposed IRS regulations which affect the First Amendment rights of religious organizations. The proposed regulations, issued in response to a court decision striking down the IRS’s approval process for auditing churches, do not include any requirement for the IRS to consider the rights of churches under the Religious Freedom Restoration Act or the First Amendment.
“The IRS cannot ignore Constitutional rights of churches.” said Luke Goodrich, Deputy National Litigation Director for the Becket Fund for Religious Liberty. “Under the proposed regulations, the IRS can audit churches, revoke tax exempt status or impose penalties without ever expressly considering church’s rights under the Religious Freedom Restoration Act or the First Amendment.”
The proposed regulations govern which IRS officials can approve an investigation into a church’s tax status. Such investigations can lead to a revocation of tax-exempt status, or other tax penalties, for a variety of reasons.
“It is crucial for the IRS to recognize that its enforcement efforts may unlawfully burden the free exercise of religion,” explain the Becket Fund’s comments. The comments recommend four concrete changes to the proposed regulations: (1) The IRS should notify churches of their free exercise rights at the beginning of an audit; (2) The IRS should attempt to minimize the burdens on free exercise rights in any church audit; (3) IRS lawyers should expressly consider free exercise rights when they review the legality of an audit or tax adjustment; and (4) IRS officials involved in a church audit should seek guidance from their superiors or IRS lawyers when the audit implicates free exercise rights.