For Immediate Release
July 29, 2004

Americans United for Separation of Church and State
www.au.org

FALWELL MISLEADING RELIGIOUS LEADERS ABOUT TAX LAW, AMERICANS UNITED TELLS
IRS

Church-State Watchdog Group Urges Tax Agency To Crack Down On Virginia TV
Preacher's Disinformation Campaign

The Rev. Jerry Falwell is misleading religious leaders about the rules
governing churches and partisan politics, and the Internal Revenue Service
should take immediate steps to clarify the situation, says Americans

for Separation of Church and State.

"Falwell is misleading America's religious leaders about federal tax law,"
said the Rev. Barry W. Lynn, Americans United executive director. "His
distortions could have serious consequences for any pastor foolish enough
to take his advice. The IRS should step in now."

In a July 28 letter to the IRS, Lynn accused the Lynchburg, Va.-based TV
preacher of launching a disinformation campaign.

Earlier this month, AU filed a complaint with the IRS about Falwell's use
of his tax-exempt Jerry Falwell Ministries to send out an e-mail and post

website message endorsing George W. Bush for president. In response,
Falwell issued another alert to supporters telling religious leaders that
they do not need to worry about federal tax law.

Under the headline, "NO CHURCH HAS EVER LOST ITS TAX-EXEMPT STATUS,"
Falwell wrote, "Every American pastor, as a tax-paying citizen, is free to
express his views and opinions."

Falwell included an analysis by Mat Staver of Liberty Counsel, a Religious
Right legal group affiliated with Falwell, asserting that the IRS rarely
enforces the "no politicking" rule and implying that churches should not
worry about it. Staver wrote that "the IRS has almost no teeth."

Lynn said Falwell and Staver are urging churches to play a dangerous game.
He noted that in 1995, the IRS revoked the tax-exempt status of the Church
at Pierce Creek in New York for partisan politicking. Other churches
accused of politicking have undergone lengthy audits or their pastors have
been have been visited by IRS agents.

Falwell, Lynn noted, is in no position to advise churches in this area. In
1993, his Old Time Gospel Hour was required by the IRS to pay $50,000 in
back taxes for diverting charitable contributions into a political action
committee that sought to elect congressional candidates. The ministry also
had its tax exemption revoked retroactively for the years 1986-87.

On two recent occasions, Falwell has denied on national television that

Old Time Gospel Hour's tax exemption was revoked. But Lynn noted that the
IRS sanction is a matter of public record and noted that it was widely
reported at the time.

In AU's letter to the IRS, Lynn sent documents supporting its charge that
Falwell is misleading pastors. Lynn urged the tax agency to take action
against Falwell and clarify tax law for religious leaders.