BR’s tax-exempt status stays intact after IRS audit

The Biblical Recorder has received a letter from the Internal Revenue Service (IRS) that calls for no change to its tax-exempt status.

The Recorder made headlines in May for being targeted by the IRS alongside two other North Carolina organizations – Samaritan’s Purse and The Billy Graham Evangelistic Association (BGEA).

The three organizations appeared in stories on the websites of Fox News, Baptist Press and other media outlets after the IRS admitted to targeting conservative political groups. Franklin Graham quickly released a letter accusing the IRS of also targeting religious groups. He pointed out that Samaritan’s Purse, located in Boone, and BGEA, based in Charlotte, were targeted around the time of the 2012 presidential election.

“I do not believe that the IRS audit of our two organizations last year is a coincidence – or justifiable,” Graham wrote. “… I believe that someone in the Administration was targeting and attempting to intimidate us. This is morally wrong and unethical – indeed some would call it ‘un-American.’”

In the letter, Graham contended Samaritan’s Purse and BGEA were singled out for the stand he and his father Billy Graham have taken on traditional marriage and for encouraging evangelicals to “vote for biblical values.” Last year, the BGEA also ran full-page ads statewide voicing support for the marriage amendment in N.C. that defined marriage only between a man and a woman.

In September 2012, both Samaritan’s Purse and BGEA received notification that the IRS would review forms they filed in 2010.

An IRS agent arrived in October to conduct a review of both groups. They were later approved with no change to their tax-exempt status.

In March of this year, the Biblical Recorder received a notice for IRS forms they filed in 2010. K. Allan Blume, editor of the Recorder, admitted he was “curious” about the reasoning behind the audit.

The Biblical Recorder’s coverage of North Carolina’s marriage amendment vote drew criticism from advocates of same-sex marriage. The Recorder’s article on Chick-fil-A President Dan Cathy, who affirmed his support of traditional family values, went viral online. The mainstream media’s coverage of Cathy’s comments eventually resulted in former Ark. Gov. Mike Huckabee calling for a Chick-fil-A Appreciation Day.

The IRS agent later explained to Blume that the audit on the Biblical Recorder related to funding the publication receives from the Cooperative Program or what the IRS called “unrelated business income.”

“Once the agent understood the Southern Baptist way of giving and supporting mission causes, there seemed to be no serious concerns,” Blume said.

Blume added, “The IRS agent was courteous and professional throughout the audit. We did not experience any form of intimidation by the agent. As expected, he had some suggestions about procedures, but affirmed that our records were in good condition.”

The IRS agent completed his work with Blume and the Recorder’s attorney on May 9. Blume received a letter of approval in August.

“I’m glad we can close this chapter of our history,” he said after receiving the letter.

When the books were shut, the audit cost the Recorder more than $15,000 in legal fees. While the IRS did not require the publication to hire legal counsel, Blume said it was necessary in order to navigate the process.

“Considering the intimidating climate that the current administration has fostered against Christian organizations, we felt it was essential to have legal counsel to guide us through the process,” Blume said.

“Our attorney specializes in non-profits and proved to be extremely valuable to us. We grieve the fact that we had to spend so much money in a defensive posture against a federal government whose job is to protect and defend us,” he said. “Sadly, this is happening too frequently to average Americans.”