Posted by Gabriel (G²) on November 14, 2007

 Some may be wondering what my personal thoughts are on the issue of Grassley’s investigations into the church & the ramifications thereof. To give more clarity before giving my answer, an article to consider (specifically, on why he’s doing the investigations):


In Perspective: Why Grassley Investigates

If Congress rewrites the tax rules for churches, they have to know how churches operate, says Richard Hammar.

Richard Hammar is editor of Church Treasurer Alert! and Church Law and Tax Report, both CT sister publications. An expert on church law and tax, Hammar has written more than 100 books for churches and clergy. CT associate editor Rob Moll e-mailed Hammar about the Senate Finance Committee’s investigation into the spending practices of six churches.

Related articles and links

Why would the Senate Finance Committee be interested in the finances of these six churches? How unusual is this step?

Senator Grassley’s letter to the six religious ministries pits the constitutional protection of religious liberty against the legitimate interest of the federal government in ensuring that religious organizations are in compliance with the tax code. Section 501(c)(3) of the tax code exempts public charities, including religious organizations, from federal taxation so long as they comply with five requirements. One of those requirements is that the charity does not pay unreasonable compensation. This is the main concern that Senator Grassley is addressing. Let me add that another requirement of section 501(c)(3) is that public charities may not intervene in political campaigns. This limitation clearly applies to religious organizations, and all attempts to challenge its constitutionality have failed.

Congress has broad authority under the Constitution to “make all laws which shall be necessary and proper” for carrying out the powers “vested by the Constitution in the government of the United States or in any department or officer thereof.” Implicit in the power to make laws is the power to conduct investigations to determine the need for legislation, and it is in this context that Senator Grassley issued his request for financial information. Senator Grassley has stated that his sole purpose is to ensure that these six large ministries, that receive a substantial amount of charitable contributions, are operating consistently with the law. Most if not all of them are exempt from filing the annual information return (Form 990) that most other tax-exempt charities must file with the IRS. As a result, the IRS has very little information concerning them.

Certainly, at some point, a Senate investigation may cross the line from gathering information to harassment, but the location of that line is not clear. You must balance the constitutional protection afforded churches on the one hand, and the legitimate interest of the government in ensuring compliance with the tax code on the other.

I believe that a good analogy is the Church Audit Procedures Act. This federal legislation balances the constitutional rights of religious organizations against the legitimate needs of government by permitting IRS audits of churches under carefully prescribed limitations. This approach has worked well for 20 years, and I think it provides a basis for evaluating Senator Grassley’s letter. We can recognize that Congress has a right to gather information concerning religious organizations’ compliance with the tax code, but this right must be limited in order to protect the constitutional guaranty of religious freedom. The limitations spelled out in the Church Audit Procedures Act provide a useful roadmap.

Any attempt by Congress to obtain financial information from religious organizations raises concerns. The constitution treats churches differently than Wal-Mart. It guarantees religious freedom. At some point, a congressional investigation into the finances of religious organizations may cross the line from a legitimate request for information to ensure compliance with the law, to an abridgement of religious freedom.

Doesn’t the IRS usually have oversight over compliance with the law?

Yes. But, the IRS is an administrative agency, meaning that it enforces the laws that Congress enacts. The Constitution grants Congress broad authority to conduct investigations into the need for legislation.

When churches report information to the IRS, what do they report, and what is the IRS concerned about?

Churches report very little information to the IRS, other than compensation and withheld taxes (Forms W-2, 1099, 941, etc.). As I noted, churches are exempt from filing the annual information return (Form 990) that most other public charities are required to file with the IRS each year.

What kind of transparency is legally required of churches?

Very little. The constitutional guaranty of religious liberty has restrained Congress from requiring churches to comply with several laws that have been enacted to promote greater transparency by both for-profit and nonprofit organizations.

Where is the line between what a church can legally provide for its pastor, like a house, and what it cannot, presumably cosmetic surgery?

The tax code permits a church to provide compensation to its pastor in any amount, and in any form, so long as this is done consistently with the law. The main limitation is that a church, like any public charity exempt from federal taxation under section 501(c)(3) of the tax code, cannot pay unreasonable compensation to any staff member. Paying unreasonable compensation will jeopardize a church’s tax-exempt status.

So a church could pay for cosmetic surgery for its pastor?

Yes, so long as the total amount of compensation paid to the pastor is reasonable in amount. The IRS cannot prescribe the form of compensation that a church pays its pastor. The First Amendment would prohibit this. The problem in these cases is that a church fails to report a taxable benefit as taxable income. This can lead to significant problems.

As you said, the Constitution gives churches broad freedom to operate. In your opinion, how much abuse of that freedom would justify Congress in requiring more financial transparency in church operations? Is this investigation a signal that some people are suspicious of the way churches have operated with little IRS oversight?

I am sure that some people are suspicious of church autonomy, but that’s a consequence of the unique constitutional protections that churches enjoy. A few years ago, a proposal was made to eliminate the exemption of churches from the annual Form 990 reporting requirement that applies to most other charities. It got nowhere. Abuses by local churches would have to be widespread, persistent, and significant for Congress to even consider greater scrutiny. We are nowhere near that point. Televangelists are a different matter entirely, due to their high visibility, revenue, and the perceived abuses recounted in Senator Grassley’s recent letters.

(G2 WORDS) That said, lets take note of some things.

Some are troubled that the actions of government should be seen with reserve. However, as another said on the subject in response,

It is the church’s failure to judge ourselves (in this case the 6 churches of major minor) and their wayward leaders. I think that God allows the gov the go ahead to “punish” and yes all will suffer behind it. It is an unavoidable consequence of not policing our own. I think it makes a stronger case for sites such as this.

You remember when God allowed the Babylonians and the Assyrians to haul off Isreal, the “righteous” were sent into captivity also. Their sins were numerous and they refused to hear, heed and change. (Jer 30). JEremiah was telling them not to follow the pimps, but all they wanted wanted peacce and prosperity. Today, these fits of excessive gluttony and binges of callous abuse of the sheep hurt all of us in the long run.

We all need to keep speaking out against this ungodly behavior and with all that we have, hold these people accountable so that God doesnt take judgment out of our hands and give it to some entity that will not care about how it will affect the church.

To that I say “AMEN!!!”. Going along with that, as another said on the subject,

Some ministries are giving “all of us a bad name because money has been misused,” Charisma magazine editor Lee Grady told The Tampa Tribune. “This is an awkward time for the church. I believe God is putting his finger on some problems and demanding that we set our house in order. If we don’t correct these problems ourselves, then the government may have to step in and do it. And that will be unfortunate.”


Again, I say “AMEN”. Going along with that, this verse (which comes out of the context where people were DISOBEYING GOD’S STANDARDS & CRAZY THINGS, such as sicknesses and death began to take place but they didn’t know why) comes immediately to mind:

 1 Corinthians 11:17-33

The Lord’s Supper

 17In the following directives I have no praise for you, for your meetings do more harm than good. 18In the first place, I hear that when you come together as a church, there are divisions among you, and to some extent I believe it. 19No doubt there have to be differences among you to show which of you have God’s approval. 20When you come together, it is not the Lord’s Supper you eat, 21for as you eat, each of you goes ahead without waiting for anybody else. One remains hungry, another gets drunk. 22Don’t you have homes to eat and drink in? Or do you despise the church of God and humiliate those who have nothing? What shall I say to you? Shall I praise you for this? Certainly not!

 23For I received from the Lord what I also passed on to you: The Lord Jesus, on the night he was betrayed, took bread, 24and when he had given thanks, he broke it and said, “This is my body, which is for you; do this in remembrance of me.” 25In the same way, after supper he took the cup, saying, “This cup is the new covenant in my blood; do this, whenever you drink it, in remembrance of me.” 26For whenever you eat this bread and drink this cup, you proclaim the Lord’s death until he comes.

 27Therefore, whoever eats the bread or drinks the cup of the Lord in an unworthy manner will be guilty of sinning against the body and blood of the Lord. 28A man ought to examine himself before he eats of the bread and drinks of the cup. 29For anyone who eats and drinks without recognizing the body of the Lord eats and drinks judgment on himself. 30That is why many among you are weak and sick, and a number of you have fallen asleep. 31But if we judged ourselves, we would not come under judgment. 32When we are judged by the Lord, we are being disciplined so that we will not be condemned with the world.

 33So then, my brothers, when you come together to eat, wait for each other.34If anyone is hungry, he should eat at home, so that when you meet together it may not result in judgment.
      And when I come I will give further directions.”

Can the situation make things difficult for the CHURCH? Of course……& that’s sad, but the realtiy is that’s the RESULT OF SIN, whether it be my own or anothers. Someone’s always affected……..

There’s also the possibility that government could end up revoking the tax-excempt status that churches/religious institutions have in light of the abuses many of the mega ministries have done with it to condone misuing excess money behind closed doors. Of course, that would be messed up…….but then again, there’s a reason why God made clear that you don’t play with UNCLE SAM when he comes calling. In the U.S, “CASH IS KING”…..&

Romans 13

Submission to the Authorities  

1Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. 4For he is God’s servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God’s servant, an agent of wrath to bring punishment on the wrongdoer.
5Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. 6This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7Give everyone what you owe him: If you owe taxes, pay taxes

Regarding these investigations, I think there’s way too much emphasis on the negatives that could come about from it. IMHO, I think this investigation will end up giving an MARVELOUS opportunity for a demostration into what the true church of God looks like:

1 Peter 2:12-17

12Live such good lives among the pagans that, though they accuse you of doing wrong, they may see your good deeds and glorify God on the day he visits us.

 Submission to Rulers and Masters

 13Submit yourselves for the Lord’s sake to every authority instituted among men: whether to the king, as the supreme authority, 14or to governors, who are sent by him to punish those who do wrong and to commend those who do right. 15For it is God’s will that by doing good you should silence the ignorant talk of foolish men. 16Live as free men, but do not use your freedom as a cover-up for evil; live as servants of God.
In the case that government/others will use possible abuses as a way of slamming the ENTIRE CHURCH (and possibly doing investigations into GOOD CHURCES as well), those churches which are truly doing their duty will have the opportunity to shine/ demonstrate what it means to be GODLY STEWARDS OF FINANCES.


It’ll give us the opportunity to truly live by the Scripture’s admonition to be like “aliens” (I Peter 2:11) in the world and demonstrate what it means to operate according to God’s Principles rather than the WORLDY ones of greed/covetousness & lack of intergrity all too familar in much of the church today.

Peter’s advice is much like’s Christ in Matthew 5:16, where He made clear that for tthose whose actions are above approach, even hostile people will end up  praising God. Remember that Peter’s readers were scattered among unbelieving Gentiles who were inclined to believe/spread LIES about Christians…….but the attractive, gracious, and upright behavior on the part of Christians proved these rumors false and could even win some og the unsaved critics to the Lord’s side.
Also, when Peter told his followers to submit to the civil authorities, we must keep in mind the fact that just as today he was discussing a government that was CORRUPT/WANTING TO CONTROL CHRISTIANS. He was speaking of the Roman Empire under Nero……& yet he still remained positive on the situation.

Even if persecution arises from the investigations, there’s still GREAT REASON TO REJOICE. For in cooperating with rulers as far as conscience allows, the GOOD NEWS and GOD’S PEOPLE become respected…….and if we’re to be persecuted, we can all be at peace that it was for the fact that we were truly OBEYING GOD and not breaking moral/civil laws.

Moreover, sometimes we must become UNCOMFORTABLE BEFORE WE’LL MOVE. Discomfort may be best for us when we’ve either become LAX in our mission or God wants to work something new. That’s how it was for the early church, 4 the persecution forced them out of their homes & spread the GOSPEL (Acts 8:1-4). God brought GREAT RESULTS out of the believer’s sufferings…..& the same is the case TODAY.(Mark 10:29-31, 2 Timothy 3:10-13)

For me, in regards to government involvement into the religious realm and the fear that it’ll lead to persecution for the church, this seems to be where the RUBBER HITS THE ROAD……because for any of us to champion correct doctrine/practice & yet shun the consequences that often come from that….consequences that the EARLY CHURCH in Acts dealt with….may be indicative of what we truly believe regarding what Christianity is all about.

Is Persecution something that the church should run from? What was the pattern in the Book of Acts for the church/believers when government persecution came as a result of pushing for making certain that correct behavior in the church took place at all costs? Was there EVER A TIME IN HISTORY WHERE PERSECUTION HINDERED/STIFFLED THE GROWTH OF THE CHURCH?

Moreover, for those who’ve studied the concept of HOUSE CHURCHES, why do you think that the house churches seem to be so much STRONGER (both in correct/sincere belief & practice of living out the faith) in countries like China/others where government persecution is EXTREME?

The government’s there ALLOW CHURCHES TO EXIST/thrive with FREE ENTERPRISE, though many of the churces condoned by government teach thingS CONTRARY TO THE FAITH while those which wish to stay doctrinally pure seem to have to  pay the price ( and for information on what I mean, I’d suggest reading the book ” The Heavenly Man” by Brother Yun, in which he describes how he recieved more persecution from churches where incorrect doctrine was preached/the state approved because he taught the TRUTH, even if it wasn’t politicallty CORRECT. Also, go here:


     Again, I think we all should seriously begin to reconsider some things and where our faith truly lies. If government intervention should take place, as Romans 13 seems to give room to, for the abuses these mega-ministries have committed……& if that leads to possible restricition/abuse in the future, should we really be running from it or worried?

Mark 10:29-31

2 Timothy 3:10-13
Paul’s Charge to Timothy  10You, however, know all about my teaching, my way of life, my purpose, faith, patience, love, endurance, 11persecutions, sufferings—what kinds of things happened to me in Antioch, Iconium and Lystra, the PERSECUTIONS I endured. Yet the Lord rescued me from all of them. 12In fact, everyone who wants to live a godly life in Christ Jesus WILL BE PERSECUTED, 13while evil men and impostors will go from bad to worse, deceiving and being deceived.

Some have said that to flee persecution is what Christ suggested be done in Matthew 10:23

In their words,

We stand on truth, but that does not mean you sit to have your head beaten in if you can escape.  If the Lord provides a means of escape, then flee.  And Paul was provided ways out many a time,  like noted in 2 Corinthians 11:32-33.  Which is why he notes the Lord rescued him those times, although ultimately Paul had to take a head chopping.  And compared to some others he died via a less painful method.  And that head chopping took him into eternal life, so even with that he won!

To that, I say cool……..but to clarify, When it talks about persecution in Matthew 10:23, it’s not saying that persecution is a bad thing to be feared (which is where I’m coming from). Obvious is the fact that Christ warned the disciples against PREMATURE MARTYDOM….for they were to leave before the persecution got too great, as did the early church when persecution happened elsewhere (Acts 8:1-4).

To note, even Jesus Himself did this

Luke 4:28-30

 28All the people in the synagogue were furious when they heard this. 29They got up, drove him out of the town, and took him to the brow of the hill on which the town was built, in order to throw him down the cliff. 30But he walked right through the crowd and went on his way.

John 8:58-59 

 58“I tell you the truth,” Jesus answered, “before Abraham was born, I am!” 59At this, they picked up stones to stone him, but Jesus hid himself, slipping away from the temple grounds.

John 10:30-39 

30I and the Father are one.”

 31Again the Jews picked up stones to stone him, 32but Jesus said to them, “I have shown you many great miracles from the Father. For which of these do you stone me?”

 33“We are not stoning you for any of these,” replied the Jews, “but for blasphemy, because you, a mere man, claim to be God.”

 34Jesus answered them, “Is it not written in your Law, ‘I have said you are gods’[a]? 35If he called them ‘gods,’ to whom the word of God came—and the Scripture cannot be broken— 36what about the one whom the Father set apart as his very own and sent into the world? Why then do you accuse me of blasphemy because I said, ‘I am God’s Son’? 37Do not believe me unless I do what my Father does. 38But if I do it, even though you do not believe me, believe the miracles, that you may know and understand that the Father is in me, and I in the Father.” 39Again they tried to seize him, but he escaped their grasp.

      So again, trying our best to avoid PRE-MATURE MARTYDOM is not a problem…….but when we as Christians become more concerned about our comfort that we’re fearful of PERSECUTION & avoid it even if the situation is warranting it (with no other options left), then that may be an issue. And in much of the church today, there may not be a way to escape many of the bad habits being promoted or to adress them so that right DOCTRINE/PRACTICE can take place again without the risk of persecution coming about. The churches that mishandled funding should’ve been dealt with a LONG TIME AGO…….BUT due to their actions, many have been damaged………& in order to deal with them, extreme measures may now have to be taken (i.e. Government Intervention) that may backfire.

If Church government were exercised today, it may’ve made a difference, where people could simply be “silenced”/disciplined as it was in the NT (I Corinthians 5 )…

1 Timothy 5:19-20 

19Do not entertain an accusation against an elder unless it is brought by two or three witnesses. 20Those who sin are to be rebuked publicly, so that the others may take warning.

       The way God set up the church system, those leaders which were NOT ABOVE REPROACH were to be confronted about their behavior, sometimes rebuked (& of course lovingly/fairly, 4 the purpose of restoration), in order that it would not ESCALATE to the point where things were BEYOND CONTROL & people could take note not to do the same or give a bad representation to the Gospel Such sins left alone, such as with the Corinthian Church, would become like wildfire and polarize the entire church.

That, however, is not the case today IMHO

But in a time where the church is no longer at the level (as in CONSISTENTLY HEALTY )  for that to  take place OR UNWILLING TO STICK WITH THE ADMONITON TO DO SO, keeping crazy situations under control is not as simple anymore. I understand the need for saints to rise up & deal with the issue by educating others/correcting the problems within the churc……but it still seems to me that has happened far too late in the game, and more extreme measures are needed.

Once it gets to the point where even the laws of the land are broken, the power to correct these individuals in NO LONGER IN OUR HANDS. It’s a GOVERNMENTAL ISSUE….& GOVERNMENT’S now been given the authority to come in as Scripture indicates in Romans 13 and CORRECT THE WRONGS.

 What are ya’lls thoughts…….


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