A key congressional committee recently took action to bolster due process protections for churches and ministries. The Senate Finance Committee advanced a bipartisan provision clarifying that nonprofit organizations have the right to appeal an adverse IRS ruling on their tax-exempt status.  

Currently, the IRS generally provides a nonprofit the opportunity to appeal if the agency denies or revokes its tax-exempt status. However, Senators James Lankford (R-Okla.) and Raphael Warnock (D-Ga.) noted that this protection was not guaranteed in law. Their provision remedies this by codifying the right to appeal and requiring that nonprofits facing an adverse ruling be made aware of that right.  

“We’re going to have an IRS that permanently says they are going to be fair, neutral to all nonprofits,” said Lankford in a meeting of the Finance Committee. “And that if there is an issue with a nonprofit and their status, they have the opportunity to be able to appeal that and make sure they get their day to… get an answer.” 

The Lankford/Warnock amendment was wrapped into the Taxpayer Assistance and Service (TAS) Act, a bipartisan bill led by Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Ore.) that aims to implement taxpayer protections and modernize the IRS, making it more efficient and responsive. For example, the legislation includes provisions to improve tracking of tax refunds, expand IRS telephone callback offerings, strengthen the National Taxpayer Advocate, and increase penalties for improper tax preparation.  

“This product reflects years of bipartisan efforts to translate stories of casework frustrations into tangible fixes designed to make the IRS work more efficiently for the American people,” said Crapo. 

The committee advanced the TAS Act, including the Lankford/Warnock amendment, by a 26-1 vote. The bill now heads to consideration by the full Senate.