The Internal Revenue Service has concluded that Senator Barack Obama’s church, the United Church of Christ, did not violate nonprofit tax laws when Senator Obama addressed the denomination’s 50th anniversary General Synod in June 2007.
You may recall that the IRS was investigating the denomination claiming that it had “reasonable belief” that the circumstances surrounding the speech had political overtones. Nonprofit organizations, including churches, are prohibited from engaging in behavior that urges support for a political candidate.
The IRS determined that the UCC had made several attempts to stay in compliance noting that the invitation to Obama came “well before he announced his candidacy and that [he] was invited to speak … in a non-candidate capacity, on how his personal faith intersected with his public life.”
Additionally, the IRS found that the UCC had advised those in attendance that Senator Obama was there as a member of the church and not as a candidate for office, that the audience should not attempt to engage in any political activities, and that the church’s legal counsel had advised Senator Obama’s campaign on the ground rules for the speech.
The IRS also concluded that the UCC did not authorize campaign volunteers to set up tables near the entrance of the Hartford Civic Center and that the UCC website provided a link to the IRS fact sheet on prohibited campaign-related activities by non-profit groups. The church’s legal counsel was also found to have properly advised UCC leaders regarding their responsibilities.
The UCC was represented in the matter by the law firm of Wilmer Cutler Pickering Hale and Dorr on a pro bono basis.
Technorati Tags:
Barack Obama, IRS, tax
No, not that man upstairs. I mean Seth P. Waxman, a partner at Wilmer Cutler Pickering Hale and Dorr.
Waxman’s firm has agreed to represent the United Church of Christ on a pro bono basis during the IRS investigation of the church’s tax-exempt status. The entire denomination’s status is at risk due to the IRS inquiry following Obama’s address at the UCC annual convention.
Legal fees were expected to reach six figures during the investigation (ouch!). The church has now ceased its attempts to collect money for legal fees; it had collected $59,564 to pay for the expected legal costs.
UCC minister and president Rev. John H. Thomas thanked the firm for its participation, saying, “While we know there will be other significant expenses associated with our defense, we are profoundly grateful to WilmerHale for offering its attorney time without the customary hourly fee.” Referring to the money collected to date, he continued, “Thanks to the immediate and generous outpouring from our members and supporters, we now believe we will have sufficient resources to cover other related legal costs.”
picApp_publisherId = 447;picApp_imageId = 1786;picApp_imageWidth = 357;picApp_imageHeight = 260;picApp_configUrl = “http://pis.picapp.com/IamProd/FlashSite/GetConfig.aspx”;picApp_Picview=”http://pis.picapp.com/IamProd/FlashSite/en/picviewerv1_1.swf”;picapp_numberOfLine=2;ImageServe();
The IRS is serious about the rules which prohibit non-profit organizations, including churches, from supporting candidates or political parties.
Just a few week after the IRS mailed a lengthy letter to First Baptist Church of Buena Park pastor Wiley S. Drake advising that he was being investigated for his 2007 support of presidential hopeful Mike Huckabee, Obama’s denomination, United Church of Christ, has announced that it had been contacted by the IRS. The IRS is investigating UCC with respect to a speech that Senator Obama made at the UCC national meeting in 2007.
The IRS has notified the UCC that “reasonable belief exists” that the circumstances surrounding the speech violated the rules. Specifically, the IRS is concerned about articles posted on the church’s web site about the speech and the fact that Obama volunteers were stationed “outside the center to promote his campaign.” You can read the letter in its entirety here downloadable as a pdf.
The church claims that it consulted with lawyers before the event to ensure compliance with the rules. Additionally, the crowd was advised beforehand by Edith Guffey, administrator of the 2007 UCC General Synod, that the speech would not be “campaign-related” and that no campaign materials or other overt signs of support related to the political campaign would be allowed. The church also noted that Obama was asked to speak at the event before he announced his candidacy for President, and that the invitation was related to Obama’s involvement in his church and not his candidacy.
But does that make it alright?
Much of the criticism from the speech is related to Obama’s remarks about the misuse of faith in America. He specifically referenced the Christian right, traditionally the GOP voter base, in his speech.
The IRS has not commented on the investigation since it is ongoing. But it will be interesting to see what the result will be since this is an investigation of an entire denomination – comprised of 1.2 million churchgoers – as opposed to a single church, which is more traditional.
What do you think? Is this on par with Drake’s email? Worse?
You can read the entire transcript of Obama’s speech after the jump if you’re interested.
[click to continue…]
