Saturday, September 27, 2008

More Tax Twists To ADF's "Pulpit Initiative"

Yesterday’s New York Times and a posting by Melissa Rogers point out another legal twist in tomorrow’s Pulpit Initiative sponsored by the Alliance Defense Fund to challenge the IRS rules on political activity by churches.. (See prior posting.) Earlier this month, three former IRS officials who are now lawyers in private practice wrote to the IRS Office of Professional Responsibility (full text of letter) asking it to investigate whether ADF has violated ethical rules binding on lawyers who practice before the IRS. Treasury Department Circular No. 230 provides that lawyers may not suggest to a prospective client that they violate any federal tax law. (Sec. 10.51(7)). ADF has offered to represent churches taking part in the Pulpit Initiative. ADF has also added a disclaimer to its website to prevent its advice being considered a "marketed opinion" as defined in Circular 230. A lawyer can issue a “marketed opinion” only if the lawyer concludes that it is more likely than not that the taxpayer will prevail using the tax advice included in the opinion. (Sec. 10.35).