A Minneapolis-area pastor says an IRS audit of his 9,000-member church is “completely unfounded and politically motivated.”
In a letter to his congregation, Mac Hammond, pastor of Living Word Christian Center (LWCC) in Brooklyn Park, Minn., said “enemies of the gospel” were behind an IRS investigation into whether compensation and loan deals between the church and Hammond violate laws for tax-exempt organizations.
“Our books are clean, and we have done what the IRS requires of a nonprofit organization,” Hammond wrote. “Pressure from outside organizations as well as media interpretation of these events has triggered the audit.”
The IRS investigation followed a 2006 complaint from a legal watchdog group alleging that Hammond violated his church’s tax-exempt status by endorsing Michele Bachmann for U.S. Congress from the pulpit. The group, Citizens for Responsibility and Ethics, also claimed that Living Word paid Hammond twice the amount per month to rent his plane than he paid to purchase it—a lease-back deal that could violate nonprofit tax rules prohibiting financially favorable deals to insiders, the Minneapolis Star-Tribune reported.
Hammond said the church cooperated with an IRS investigation into the church’s political activities and answered additional questions about financial transactions he made with the church. He said the political issue was “completely resolved” when the IRS announced in October 2007 that it was opening an audit of the ministry. The church has since refused to provide the requested information, saying the IRS has not followed procedures designed to protect churches from political bias.
In March, the IRS issued a summons requesting information regarding Hammond’s compensation, benefits, outside businesses and aircraft, as well as details on loans for Hammond's home that the church forgave. Living Word again refused to comply, arguing that the request was not made by “an appropriate high-level IRS official,” the Star-Tribune reported.
The IRS subsequently filed a petition in U.S. District Court to force the church to release information. A hearing is set for Oct. 2, when the church will be allowed to explain why it should not have to comply with the IRS request.
Hammond, a prominent charismatic minister, said the IRS efforts are part of “a very clear effort, national in scale, to discredit, defame and intimidate ministries and preachers of what has been called the ‘prosperity gospel.’”
Last fall, Sen. Charles Grassley, the highest ranking Republican on the Senate Finance Committee, launched an investigation into the financial dealings of six large charismatic ministries, including that of Kenneth Copeland. Copeland has not cooperated with Grassley’s investigation, saying the ministry’s resources belong to God, not the government, and that he would be willing to go to jail over the issue. According to the Star-Tribune, Copeland is on the board of Living Word, and Hammond serves on Copeland’s board. Hammond’s church is not a target of Grassley’s investigation.
In his letter to Living Word, Hammond said “enemies of the gospel” are “fearful not only of the moral imperative communicated by these [prosperity] ministries, but the growing wealth and influence of those constituencies. … The opponents of Christian ideology rightly understand that to limit our influence, they must limit our growing wealth—and to accomplish this goal, they must undermine and corrupt the commitment of the donor base.”
A spokeswoman for Grassley, who is a longtime Baptist, told the Star-Tribune that the Iowa senator is not targeting any particular doctrine and was not familiar with the prosperity gospel before he launched his investigation.
Living Word spokesman Brian Sullivan said the church would comply with the court’s decision after the Oct. 2 hearing, the Star-Tribune reported. "We don't feel we have anything to hide," he said.
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