Letter demands answers on how the IRS handles tax-exempt status applications from religious organizations. 

Today, U.S. Senator Cindy Hyde-Smith (R-Miss.) along with several of her colleagues sent a letter asking the U.S. Treasury Department on how the Internal Revenue Service handles tax-exempt status applications from religious organizations.

Sen. Hyde-Smith stated on social media that it is not within the role of the IRS to deny public benefits to organizations on the basis of its religious affiliation.

The letter addressed to Treasury Inspector General J. Russell George requests a review of IRS processes for making tax-exempt status determinations, and the apparent failure of agency quality controls in the case of Christians Engaged, a nonprofit religious organization.

“Churches and religious organizations, like many other charitable organizations, qualify for exemption from federal income tax under IRC Section 501(c)(3) and are generally eligible to receive tax-deductible contributions,” The Senators wrote.

“Nevertheless, recent events surrounding the determination of tax-exempt status of Christians Engaged has focused our attention on the processes and procedures the IRS uses when determining whether a religious organization should be granted tax-exempt status, while simultaneously generating broad concern over the standard of the IRS’s neutral and respectful consideration of such applications,” the letter continued.

The Senators ask the Treasury Inspector General to review and report on the IRS’s current review processes and procedures for making tax-exempt status determinations. They ask for several things to be included in the report such as:

  • Full description of the process and layers of review the IRS Exempt Organizations unit follows when making determinations and issuing proposed adverse determination letters.
  • Description of the training provided to IRS personnel who participate in tax-exempt status determination decisions or draft, related determination correspondence. Any information on whether a particular emphasis is placed on civil and Constitutional rights during such training. Also include information on how often the training is provided and whether training is different for agents at the management level and above.
  • Description of how the IRS evaluates its own review process to determine its success.  Please also include any remediation or sanctions processes that the IRS has in place if the review process fails, including when determinations are issued with biased, inappropriate, or extraneous commentary.
  • Identification of why the processes and procedures that involve numerous layers of quality control reviews, including to ensure that extraneous commentary is not included, failed in the proposed adverse determination of Christians Engaged’s application, in which the IRS included what many would consider to be inappropriate and offensive normative and political commentary.
  • Making recommendations on ways the IRS can improve its processes, procedures, reviews, communication, and training regarding determinations of tax-exempt status for applicant organizations, as well as IRS correspondence with such organizations.

“It is important to ensure that the multiple steps the IRS identified, including layers of ‘quality control’ review, are indeed based on law and fact, and absent extraneous and inappropriate commentary.  As an agency within the federal government, the IRS should take care to ensure no decisions are based on bias for or against a political or religious viewpoint,” the Senators wrote in the letter.

Senators John Barrasso (R-Wyo.), Mike Braun (R-Ind.), Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Jim Inhofe (R-Okla.), Jerry Moran (R-Kan.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Tim Scott (R-S.C.), and Todd Young (R-Ind.) also signed the letter.

You can read the letter here.