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IRS backs down, gives prayer ministry tax-exempt status

The IRS is backtracking after initially denying tax-exempt status to a Texas prayer organization.

Stephen K. Martin, director of exempt organization rulings and agreements, had earlier cited a claim that prayer and Bible study favor Republicans as the reason for denying the status. Now, Christians Engaged has received another letter in which Martin announced a reversal regarding that controversial decision.

“We’re pleased to tell you we determined you’re exempt from federal income tax under Internal Revenue Code 501(C)(3). Donors can deduct contributions they make to you under IRC Section 170,” the letter reads.

Martin didn’t say in the letter why he reversed his previous position, which was reported by Metro Voice.

Martin had said in a May 18 letter to the group, which was recognized as exempt from state taxes in 2019, that it wasn’t eligible for federal exemption because it “[engages] in prohibited political campaign intervention” and “[operates] for a substantial non-exempt private purpose and for the private interests of the [Republican] party.”

Christians Engaged is a nonpartisan group that encourages prayers for all government leaders at every levels.

The group was represented in an appeal of Martin’s initial decision by First Liberty Institute, a Plano, Texas-based public interest law firm that specializes in religious freedom litigation.

READ: 76+ million strong prayer group for Israel banned by Facebook

“This is truly great news for our client, as well as religious organizations and churches across America,” Lea Patterson, counsel for First Liberty Institute, said in a statement. “We are grateful the IRS changed course to bring its decision into line with the Constitution and its own regulations.”

In the appeal of Martin’s May decision, Patterson argued three points against the initial tax-exempt finding by the IRS executive.

“By finding that Christians Engaged does not meet the operational test, Director Martin errs in three ways 1) he invents a nonexistent requirement that exempt organizations be neutral on public policy issues; 2) he incorrectly concludes that Christians Engaged primarily serves private, nonexempt purposes rather than public, exempt purposes because he thinks its beliefs overlap with the Republican Party’s policy positions; and 3) he violates the First Amendment’s Free Speech, and Free Exercise, and Establishment clauses by engaging in both viewpoint discrimination and religious discrimination,” Patterson wrote.

After news of the earlier denial spread, numerous members of Congress, who saw a repeat of the targeting scandal in 2013 under Martin’s predecessor, Lois Lerner, also spoke out against the initial decision.

“The IRS under the Biden-Harris administration is up to no good and appears to be abusing its vast powers for political gain,” Rep. James Comer (R-Ky.), the top GOP member of the House Committee on Oversight and Government Reform, told The Epoch Times.

“This attack on religious liberty must be stopped and investigated. No federal bureaucrat should be able to wield such massive power and ignore government regulations to target an organization based on their religious beliefs.”

–Wire services