IRS gives tax-exempt status to Christian political group after backlash

The Internal Revenue Service agreed to grant tax-exempt status to Christians Engaged, a nonprofit that urges Christians to pray for elected officials and vote, after coming under pressure from conservatives.

The group’s legal advocate, First Liberty Institute, said Wednesday that the reversal comes after a national backlash against the IRS’s initial rejection of Christians Engaged’s nonprofit status because, the IRS claimed, “[B]ible teachings are typically affiliated with the [Republican] party and candidates.” Several prominent Republican lawmakers in Congress had criticized the IRS decision in recent days.

The IRS reversal comes as the agency is facing a decision over its budget at a time when the IRS has been stretched over the past year to deal with new tax laws, the distribution of multiple rounds of Economic Impact Payments and soon a monthly Child Tax Credit that it will need to start disbursing next week. Several Republicans in Congress have already signaled their opposition to plans by the Biden administration to increase the IRS’s enforcement budget to bring in more money to pay for the administration’s proposed budget and its American Families Plan and American Jobs Plan. In 2013, the IRS faced criticism from Republicans who accused the agency of targeting Tea Party and conservative groups that were seeking tax-exempt status for extra scrutiny, and the scandal led to the ouster of the director of the IRS’s Exempt Organizations unit and the acting commissioner, along with other top officials.

Samuel Corum/Bloomberg

The IRS decision to approve tax-exempt status was welcomed by the group. “I am incredibly thankful to the IRS for doing the right thing, and we look forward to continuing our mission of educating more followers of Jesus to pray for our nation and to be civically engaged,” said Christians Engaged President Bunni Pounds in a statement. “When we stand up, our republic works for all Americans.”

Christians Engaged incorporated in July 2019 as a Texas nonprofit corporation “formed exclusively for charitable, religious, educational, or scientific purposes.” From a religious perspective, the group said it offers nonpartisan religious and civic education, focusing on encouraging and educating Christians to be civically engaged as a part of their religious practice. Christians Engaged applied for tax exempt status in late 2019. On May 18, IRS Exempt Organizations Director Stephen A. Martin denied the application, saying that Christians Engaged “engage[s] in prohibited political campaign intervention” and “operate[s] for a substantial non-exempt private purpose and for the private interests of the [Republican] party.” After the appeal, Martin granted the application for 501(c)(3) status.

“This is truly great news for our client, as well as religious organizations and churches across America,” said Lea Patterson, counsel for First Liberty Institute, in a statement. “We are grateful the IRS changed course to bring its decision into line with the Constitution and its own regulations.”

Last week, several Republican lawmakers urged the IRS to change course. House Ways and Means Republican leader Kevin Brady, R-Texas, and Oversight Subcommittee Republican leader Mike Kelly, R-Pennsylvania, sent a letter to IRS Commissioner Chuck Rettig asking him to address their concerns. “The IRS denial letter singles out Christians Engaged, the organization applying for tax exempt status, because the agency views bible teachings to be Republican-affiliated,’” they wrote. “There are major concerns with this approach. First, it is widely known that Democrats also have strongly held religious beliefs. Even this week, White House Press Secretary Jen Psaki described President Biden as ‘a strong man of faith’ and described his beliefs as something not to be viewed ‘through a political prism.’ Given the strongly held beliefs in biblical teachings by politicians on both sides of the aisle, it is unfounded to conclude that biblical teachings are affiliated with any particular political party.”

Sen. Ted Cruz, R-Texas, hailed the IRS’s decision to reverse its position, referring to the Tea Party targeting scandal. “Sadly following in the footsteps of the Obama IRS, the Biden IRS was likewise politically weaponized when it indefensibly denied tax-exempt status to the Texas nonprofit organization Christians Engaged,” Cruz said in a statement Wednesday. “I was proud to stand with 14 of my colleagues in calling out this brazen politicization and demanding the reversal of this open discrimination against Christians. Thankfully, under public scrutiny, the Biden administration was forced to change course; today's reversal is a victory for our religious freedoms and for Americans of faith across our country. But the initial denial stands as a warning that if we don't stand up for our liberties and fight to hold this administration accountable, the Biden administration is more than willing to use the IRS as a political weapon."