SOUTHERN FAITH MINISTRIES, INC. v. GEITHNER
660 F.Supp.2d 54 (2009)
SOUTHERN FAITH MINISTRIES, INC., Plaintiff,
v.
Timothy F. GEITHNER, Secretary, U.S. Department of the Treasury, et al., Defendants.
Civil Action No. 09-0515(JR).
United States District Court, District of Columbia.
October 6, 2009.
Christopher S. Rizek, Matthew C. Hicks, Caplin & Drysdale Chartered, Washington, DC, for Plaintiff.
Duston K. Barton, U.S. Department of Justice, Washington, DC, for Defendants.
MEMORANDUM OPINIONJAMES ROBERTSON, District Judge.
Churches are generally exempt from federal taxation. The Internal Revenue Service, however, may inquire into the validity of a claim of exemption and investigate potentially taxable actions. To avoid excessive intrusion and entanglement into religious affairs, Congress has placed limits on that authority. The IRS may not examine a church without first conducting a "church tax inquiry." 26 U.S.C. § 7611(b). And, before conducting a church tax inquiry, an "appropriate high-level Treasury official" must reasonably believe and record in writing that the church may not be exempt or may be engaging in taxable activities. 26 U.S.C. § 7611(a)(2).
The Internal Revenue Code defines "appropriate high-level Treasury official" as the "Secretary of the Treasury or any delegate of the Secretary whose rank is no lower than that of a principal Internal Revenue officer for an internal revenue region." 26 U.S.C. § 7611(h)(7). The IRS, by regulation, had earlier determined that a "Regional Commissioner" met that requirement, Treas. Reg. § 301.7611-1T, Q & A(1), but in 1998 Congress restructured the IRS away from a geographic approach toward a topic-based organization and eliminated the position of "Regional Commissioner." See Internal Revenue Service Restructuring and Reform Act of 1998, Pub.L. No. 105-206, § 1001(a), 112 Stat. 685 (1998). Congress did not amend the definition of "appropriate high-level Treasury official" for purposes of the church tax inquiry.
The present case involves an IRS church tax inquiry into the affairs of Southern Faith Ministries that was initiated in July 2006.1 Marsha A. Ramirez, who was then Director of Exempt Organizations Examination ("DEOE"), approved the inquiry. Southern Faith Ministries deems the inquiry faulty because the DEOE is not an "appropriate high-level Treasury official" under the statute. See United States v. Living Word Christian Ctr., 2009 WL 250049, 2009 U.S. Dist. LEXIS 6902 (D.Minn.2009) (refusing to enforce IRS summons because DEOE was not an "appropriate high-level Treasury official"). Although the IRS holds to its position that the DEOE's approval is sufficient for a church tax inquiry, the IRS has proposed regulations that would kick the approval one level up to the Director of Exempt Organizations ("DEO"), the person to whom the DEOE reports. See Amendments to the Regulations Regarding Questions and Answers Relating to Church Tax Inquiries and Examinations, 74 Fed. Reg. 149 (proposed July 31, 2009) (to be codified at 26 C.F.R. part 301). Southern Faith Ministries seeks a writ of mandamus
requiring a reasonable belief determination from an "appropriate high-level Treasury official" before the IRS can continue its church tax inquiry. Setting aside the strangeness of the form of relief plaintiff seeks,2 even assuming that the DEOE is not an "appropriate high-level Treasury official" under the Internal Revenue Code, Southern Faith Ministries' complaint must be dismissed. A remedy for IRS noncompliance with the church tax inquiry statute is available only in the context of a summons enforcement proceeding. Even then, all a court can do is stay the church tax inquiry until the noncompliance is corrected. Section 7611(e)(2) states: Remedy to be exclusive. No suit may be maintained and no defense may be raised in any proceeding (other than as provided in paragraph (1)), by reason of any noncompliance by the Secretary with the requirements of this section.
1. Southern Faith Ministries has not had its tax exemption status revoked, nor has it been taxed for any particular acts.
2. Mandamus does not lie to require a government official to perform a purely discretionary act. See Shoshone-Bannock Tribes v. Reno,56 F.3d 1476, 1479 (D.C.Cir.1995).