ACLJ Secures Victory for Christian Coalition Against I.R.S.; Federal Judge Orders I.R.S. to Issue Tax Refund for Coalition After I.R.S. Concedes that Coalition was a Tax-Exempt Organization.

Business Editors

NORFOLK, Va.--(BUSINESS WIRE)--July 25, 2000

U.S. District Court Judge Henry Morgan, Jr. today ordered the Internal Revenue Service to refund the taxes paid by the Christian Coalition for the tax year 1990 after the IRS conceded in court that the Coalition was operating as a tax-exempt organization under 501(c)(4) of the tax code for 1990. The action today brings to an end a federal lawsuit brought by the American Center for Law and Justice against the IRS in February 2000.

"This is a clear and concise victory for the Christian Coalition," said Jay Sekulow, Chief Counsel of the ACLJ who represented the Coalition. "It is clear that the IRS singled out the Christian Coalition and engaged in discriminatory action against the Coalition because of the organization's political views. It is also clear that the IRS wrongly assessed and collected taxes. Today's action removes a cloud that has been hanging over the Christian Coalition due to the discriminatory behavior of the IRS."

The ACLJ filed suit in federal court in February charging the IRS with discriminatory action when it rejected the Coalition's application for tax-exempt status in July 1999 - after a decade of review. The suit charged that the IRS acted in an arbitrary and capricious manner by denying the Coalition's tax-exempt status while granting tax-exempt status to liberal groups including the Democratic Leadership Council, the Planned Parenthood Action Fund, and Americans for Democratic Action.

The suit contended that the activities of the Coalition -- including the distribution of voter guides -- provided educational information, were non-partisan and promoted social welfare -- ingredients the IRS maintains are required for tax-exemption under 501(c)(4). The suit also contended that the IRS acted illegally when it assessed and collected taxes from the Coalition for the 1990 tax year.

In a hearing today in U.S. District Court in Norfolk, Virginia, Judge Henry Morgan, Jr. ordered the IRS to refund the Coalition $169.26 for the tax year 1990. The consent order was issued after the IRS conceded in court today that the Coalition was tax-exempt under 501(c)(4) of the tax code for 1990.

"This is the outcome we had been hoping for in this case," said Sekulow. "The IRS conceded that the Coalition was tax-exempt under 501(c)(4) which is exactly what the Coalition asked for in the lawsuit. This is an important case that should send a strong message to the IRS - the bullying and discriminatory tactics used against the Christian Coalition will not succeed."

In August 1999, the U.S. District Court in Washington, D.C. threw out key charges in a lawsuit by the Federal Election Commission that challenged Coalition voter guides. The court ruled that the Coalition's voter guides, scorecards, and other activities were not made in connection with any federal election and were not in violation of the Federal Election Campaign Act.

The Christian Coalition was founded by religious broadcaster Pat Robertson in 1989.

The American Center for Law and Justice is an international public interest law firm that specializes in pro-family, pro-life, and pro-liberty issues. The ACLJ maintains offices nationwide and its Web site address is www.aclj.org.