This article appeared in The Oregonian on Sat. April 10, 1993: RELIGION AND POLITICS - Som

This article appeared in The Oregonian on Sat. April 10, 1993:

RELIGION AND POLITICS - Some observers say the IRS' decision to fine
Jerry Falwell's group for political involvement is a move in the right
direction.

WASHINGTON..........by David E. Anderson........Religious News Service..

A decision by the Internal Revenue Service to fine Jerry Falwell's Old
Time Gospel Hour(OTGH) $50,000 and revoke its tax-exempt status for two
years may be a beginning of a crackdown on involvement of religious
groups in politics. That's the assessment of Arthur Kropp, president of
People for the American Way, a civil liberties watchdog group, who views
it as a positive step. "I think it's an encouraging sign that the IRS is
taking a hard look and taking action," he said.

Kropp was reacting to a recent announcement that Jerry Falwell's OTGH
has agreed to pay a $50,000 fine to the IRS after a prolonged audit of
the evangelist's many ministries showed that some activities violated
tax laws. The IRS investigation, which scrutinized the organization's
activities in 1986-87, found that ministry personnel were used to raise
money for a political action committee (PAC), called I Love America
Committee, which was formed by an official in Falwell's Moral [sic]
Majority [sic] to back congressional candidates. The law bars tax-
exempt bodies from participating in political campaigns on behalf
of specific candidates.

The agreement reached between the government and Falwell brings to an
end a far-ranging investigation by the government, involving not only
Falwell's ministries but the independent baptist minister himself.
Falwell, pastor of Thomas Road baptist church in Lynchburg, Va., is best
known as a fiery fundamentalist preacher on the OTGH and as a founder of
the Moral [sic] Majority [sic], the most prominent and influential
organization of the conservative political movement that tapped into
American evangelicalism and fundamentalism.

BOTH THE I LOVE AMERICA COMMITTEEE AND THE MORAL [sic] MAJORITY [sic]
HAVE BEEN DISBANDED.

Earlier, the IRS revoked the tax-emempt status of the Libery Federation,
another Falwell organization with a wider public policy agenda than the
Moral Majority, after determining it did not operate soley for religious
and charitable purposes.

Kropp said the $50,000 fine amounted to little more than "a slap on the
hand," given that the OTGH raised about $94 MILLION during the years
affected by the investigation. "The penalty seems pretty meager."
Another critic of church-state entanglement, Brent Walker of the baptist
Joint Committee on Public Affairs, agreed that the IRS action shows it
is "taking seriously the tax code's prohibition on tax-exempt
organziations' engaging in political activity."

Terms of an agreement signed in mid-February called for the OTGH to
publicize the settlement to media outlets chosen by the federal agency,
but many news outlets got information of the the penalty from the IRS.
"We followed the instruction exactly," said Mark DeMoss, a spokesman for
Falwell. But he said that when nobody picked up the story, the IRS
apparently decided to publicize the agreement itself. The agreement
calls for the OTG Hours' tax-exempt status to be revoked for the years
1986-87 but reinstated in 1988 and the ministry continue to be
tax-exempt.

"This closes the Falwell-related audits," said DeMoss, who added that the
contributors to the OTGH in 1986-87 will not have to revise their tax
returns for that year. "The agreement should not have any impact on the
OTGH or its donors," he said. The audits and investigations grew out of
a series of congressional hearings in the late 1980s at the time of the
scandal surrounding the PTL empire of Jim and Tammy Bakker and concerns
that the newly prominent evangelical movmement was misusing - for
political or personal purposes - some of the tens of millions of dollars
being contributed to the ministeries.

Under the law, in order for a non-profit group to remain tax-exempt, it
must refrain from partisan political activity or endorsing specific
candidates in an election. Money use for such political purposes is not
tax-exempt. The IRS reportedly began about 40 investigations of
religious groups at the time. In 1991, the IRS assessed the Jimmy
Swaggery ministries $171,122 in back taxes and interest for 1985-86.