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Why Sen. Grassley Has No Right to Audit Any Church or Ministry July 8, 2008

Posted by Daniel Downs in 16th Amendment, Chuck Grassley, Constitution, income tax, IRS, law, news, politics, religion.
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I’m still receiving comments on a previous post about Sen. Grassley’s unlawful exploratory witch hunt for ministers who have become wealthy with a life-style to match. On principle, I think minister living like multi-millionaires is unwise. Nevertheless, I know that at some of the ministries under Sen. Grassley’s gaze have huge budgets with a substantial part going out support missionaries, orphanages, and the like. Many of them having speaking engagement around the world. Therefore, owning their own jet is like owning a nice touring car to the rest of us.

That does not mean that their financial practices could never be suspect. Congress passed law for the IRS to follow when churches and related ministries become suspect. Sen. Grassley should read and abide by them. Below are the major portions of that law:

TITLE 26 -INTERNAL REVENUE CODE
 
CHAPTER 78 -DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE
 
§ 7611. Restrictions on church tax inquiries and examinations
 
(a) Restrictions on inquiries
 
(1) In general
 
The Secretary may begin a church tax inquiry only if—
 
(A) the reasonable belief requirements of paragraph (2), and
 
(B) the notice requirements of paragraph (3), have been met.
 
(2) Reasonable belief requirements
 
The requirements of this paragraph are met with respect to any church tax inquiry if an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church—
 
(A) may not be exempt, by reason of its status as a church, from tax under section 501 (a), or
 
(B) may be carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities subject to taxation under this title.
 
(3) Inquiry notice requirements
 
(A) In general
 
The requirements of this paragraph are met with respect to any church tax inquiry if, before beginning such inquiry, the Secretary provides written notice to the church of the beginning of such inquiry.
 
(B) Contents of inquiry notice
 
The notice required by this paragraph shall include—
 
(i) an explanation of—
 
(I) the concerns which gave rise to such inquiry, and
 
(II) the general subject matter of such inquiry, and
 
(ii) a general explanation of the applicable—
 
(I) administrative and constitutional provisions with respect to such inquiry (including the right to a conference with the Secretary before any examination of church records), and
 
(II) provisions of this title which authorize such inquiry or which may be otherwise involved in such inquiry.
 

I emphasized the phrases above to highlight the legal requirements to initiate an audit of possible non-compliance with exemption rules and tax laws. It should be obvious to all that Sen. Grassley is attempting to do the IRS’ job. This means that their is not sufficient evidence in writing to warrant an investigation of the ministries under Grassley illegal search. Of course, modern politicians do not always abide by the laws they or their predecessors have created.

Under the rule of law, the US Treasury Secretary was given sole authority to commission an IRS audit of churches or related organizations. Congress also gave authority to IRS agents to conduct legitimate audits of the same. Sen. Grassley must have a problem with the rule of law. Or, maybe he’s living a childhood dream of being a high-ranking Treasury official and a tough-guy IRS agent.

Wannabe Treasury Secretary and IRS agent Sen. Grassley should go back to playing US Senator and let the IRS do its job.

Better still, Sen. Grassley should be looking into the most important issue about tax fraud. That is, whether the states actually ratified the 16th amendment to the Constitution. I checked out from a law library in my state the well research book entitled “The Law That Never Was.” It is apparent that there was not enough states that actually ratified the 16th amendment according to procedural law. The Supreme Court and Congress have refused to directly deal with the issue. The courts have tried tax evaders who have refused to pay taxes because of this and similar research. Yet, they have refused to deal with the actual issue–an amendment not legally ratified.

Consequently, politicians like Sen. Grassley make the legality of the income tax amendment even more suspect when they don’t abide by the tax laws themselves. Maybe that’s why he is obsessed with auditing so many non-profits–it used to be called a guilty conscience. A few examples are those big named preachers whose harshly judgmental preaching mirrored the underlying guilt for the immoral obsessions that led to the end of their ministry. The same applies to others behaviors like financial wrongs.

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