REVIEW OF INTERNAL REVENUE CODE SECTION 501(c)(3) REQUIREMENTS FOR RELIGIOUS ORGANIZATIONS HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION MAY 14, 2002 Serial No. 107–69 Printed for the use of the Committee on Ways and Means ( U.S. GOVERNMENT PRINTING OFFICE 80–331 WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 W:\DISC\80331.XXX txed01 PsN: txed01 COMMITTEE ON WAYS AND MEANS BILL THOMAS, California, Chairman PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania WALLY HERGER, California SANDER M. LEVIN, Michigan JIM MCCRERY, Louisiana BENJAMIN L. CARDIN, Maryland DAVE CAMP, Michigan JIM MCDERMOTT, Washington JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin JIM NUSSLE, Iowa JOHN LEWIS, Georgia SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts JENNIFER DUNN, Washington MICHAEL R. MCNULTY, New York MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California WES WATKINS, Oklahoma KAREN L. THURMAN, Florida J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas JERRY WELLER, Illinois EARL POMEROY, North Dakota KENNY C. HULSHOF, Missouri SCOTT MCINNIS, Colorado RON LEWIS, Kentucky MARK FOLEY, Florida KEVIN BRADY, Texas PAUL RYAN, Wisconsin ALLISON GILES, Chief of Staff JANICE MAYS, Minority Chief Counsel SUBCOMMITTEE ON OVERSIGHT AMO HOUGHTON, New York, Chairman ROB PORTMAN, Ohio WILLIAM J. COYNE, Pennsylvania JERRY WELLER, Illinois MICHAEL R. MCNULTY, New York KENNY C. HULSHOF, Missouri JOHN LEWIS, Georgia SCOTT MCINNIS, Colorado KAREN L. THURMAN, Florida MARK FOLEY, Florida EARL POMEROY, North Dakota SAM JOHNSON, Texas JENNIFER DUNN, Washington Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occur- rences are inherent in the current publication process and should diminish as the process is further refined. ii VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 W:\DISC\80331.XXX txed01 PsN: txed01 C O N T E N T S Page Advisory of May 7, 2002, announcing the hearing ............................................... 2 WITNESSES Internal Revenue Service, Steven T. Miller, Director, Exempt Organizations ... 6 Americans United for Separation of Church and State, Reverend Barry W. Lynn ...................................................................................................................... 47 American Center for Law & Justice, Colby M. May ............................................. 23 Coral Ridge Ministries, D. James Kennedy ........................................................... 53 Hopkins, Bruce R., Polsinelli, Shalton & Welte .................................................... 12 Interfaith Alliance, Reverend C. Welton Gaddy .................................................... 38 National Council of Churches of Christ in the USA, Brenda Girton-Mitchell ... 56 New Bethel Baptist Church, Hon. Reverend Walter E. Fauntroy ....................... 43 SUBMISSIONS FOR THE RECORD Alliance for Justice, Nan Aron, letter .................................................................... 85 American Jewish Committee, statement ............................................................... 86 American Jewish Congress, statement .................................................................. 86 Anti-Defamation League, New York, NY, statement ............................................ 92 Baptist Joint Committee, J. Brent Walker, and K. Hollyn Hollman, letter and attachment .................................................................................................... 93 Bopp, James, Jr., Bopp, Coleson & Bostrom, Terre Haute, IN, statement ......... 94 Edwards, Hon. Chet, a Representative in Congress from the State of Texas, statement .............................................................................................................. 100 Islamic Supreme Council of America, statement .................................................. 101 Jones, Hon. Walter B., a Representative in Congress from the State of North Carolina, statement ............................................................................................. 102 Maryland Bible Society, Reverend Raymond T. Moreland, letter ....................... 103 National Council of Nonprofit Associations, Audrey R. Alvarado, letter ............ 103 OMB Watch, Kay Guinance, statement ................................................................. 104 People for the American Way, Ralph G. Neas, and Stephenie Foster, letter ..... 106 Religious Freedom Coalition, William J. Murray, statement .............................. 106 Rutkowski, Robert E., Topeka, KS, letter .............................................................. 107 Soka Gakkai International-USA Buddhist Association, Bill Aiken, letter ......... 109 Union of Orthodox Jewish Congregations of America, Harvey Blitz, Richard B. Stone, Rabbi T. Hersh Weinreb, and Nathan J. Diament, letter ................ 109 Wood, William, Charlotte, NC, statement ............................................................. 110 Aiken, Bill, Soka Gakkai International-USA Buddhist Association, letter ........ 109 Alvarado, Audrey R., National Council of Nonprofit Associations, letter ........... 103 Aron, Nan, Alliance for Justice, letter ................................................................... 85 Blitz, Harvey, Union of Orthodox Jewish Congregations of America, letter ...... 109 Diament, Nathan J., Union of Orthodox Jewish Congregations of America, letter ...................................................................................................................... 109 Foster, Stephenie, People for the American Way, letter ...................................... 106 Guinance, Kay, OMB Watch, statement ................................................................ 104 Hollman, K. Hollyn, Baptist Joint Committee, letter and attachment ............... 93 Murray, William J., Religious Freedom Coalition, statement ............................. 106 Neas, Ralph G., People for the American Way, letter .......................................... 106 Stone, Richard B., Union of Orthodox Jewish Congregations of America, let- ter .......................................................................................................................... 109 Walker, J. Brent, Baptist Joint Committee, letter and attachment .................... 93 Weinreb, Rabbi T. Hersh, Union of Orthodox Jewish Congregations of Amer- ica, letter ............................................................................................................... 109 iii VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 W:\DISC\80331.XXX txed01 PsN: txed01 VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 W:\DISC\80331.XXX txed01 PsN: txed01 REVIEW OF INTERNAL REVENUE CODE SEC- TION 501(c)(3) REQUIREMENTS FOR RELI- GIOUS ORGANIZATIONS TUESDAY, MAY 14, 2002 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON OVERSIGHT, Washington, DC. The Subcommittee met, pursuant to notice, at 2:00 p.m., in room 1100 Longworth House Office Building, Hon. Amo Houghton (Chairman of the Subcommittee) presiding. [The advisory announcing the hearing follows:] (1) VerDate 11-MAY-2000 01:17 Aug 15, 2002 Jkt 010199 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 W:\DISC\80331.XXX txed01 PsN: txed01 2 ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON OVERSIGHT FOR IMMEDIATE RELEASE Contact: (202) 225–7601 May 7, 2002 No. OV–12 Houghton Announces Hearing on the Review of Internal Revenue Code Section 501(c)(3) Requirements for Religious Organizations Congressman Amo Houghton (R–NY), Chairman, Subcommittee on Oversight of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing to review Internal Revenue Code (I.R.C.) Section 501(c)(3) require- ments for religious organizations. The hearing will take place on Tuesday, May 14, 2002, in room 1100 Longworth House Office Building, beginning at 2:00 p.m. In view of the limited time to hear witnesses, oral testimony at this hearing will be from invited witnesses only. However, any individual or organization not sched- uled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing. BACKGROUND: I.R.C. § 501(c)(3) organizations—such as religious, charitable, educational, sci- entific, and literary organizations—enjoy certain benefits because of their tax-ex- empt status: • Being exempt from Federal income taxation under I.R.C. § 501(a), and • Allowing