IRS’s auditing of religious groups drops sharply under political, church influence

The Internal Revenue Service’s (IRS) attempt to monitor and penalize congregations and denominations that are seen as violating their tax exempt status by engaging in politics and other financially unethical practices has declined sharply in recent years, particularly due to the influence of prosperity ministries and Republican dominance in Congress, according to research by Dusty Hoesly of the University of California at Santa Barbara. In a paper presented at the late-October meeting of the Society for the Scientific Study of Religion, Hoesly noted that IRS regulation of religion has shifted over the decades, with new religious movements, such as Scientology and the Unification Church, and mail-order churches, such as the Universal Life Church, receiving the most scrutiny.

The financial abuses of prosperity ministries from the 1980s to 2012 began another round of church audits, ending only when the Evangelical Council for Financial Accountability, an effort to self-regulate financial abuse among ministries, increasingly served as a shield for prosperity ministries against being audited. The number of audits dropped from about 17 per year after 2001 to only 3 audits per year between 2009 and 2015. Although current figures were not accessible, Hoesly said that the low number of audits has likely continued, especially since the 2015 scandal showing the IRS targeting specific political groups and the Republican attempts, under President Donald Trump, to strike down the Johnson Amendment, which prohibits churches from endorsing political candidates.