Christian University’s Tax-Exempt Status Challenged

By Susan Jones | May 29, 2009 | 10:36 AM EDT

( – An organization that often targets conservative religious groups is asking the Internal Revenue Service to review the tax-exempt status of Liberty University, after the Christian school dropped its official recognition of a student-run Democratic club.
“Liberty University is a tax-exempt institution and isn’t allowed to support one party over another,” said the Rev. Barry W. Lynn, executive director of Americans United. “If the school insists on pushing policies that favor Republicans over Democrats, it should have to surrender its tax exemption.”
The Lynchburg, Va.-based school told that although it has revoked official recognition and funding for the university’s College Democrats, it is still allowing the club to meet on campus and has not “banned” the club, as some media outlets reported.
The school says its decision was based not on political considerations, but solely on the moral issues of abortion and same-sex marriage, which it opposes.
In a letter to the IRS on Wednesday, however, Lynn argued that by giving official recognition and student funding to a Republican club but not a Democratic one, Liberty has run afoul of the tax code.
According to Americans United, Liberty’s Republican club endorses candidates for public office and works on their behalf with university recognition and student funding, actions which are denied to the Democratic club.
“Liberty University has no right to do partisan proselytizing and still retain a tax exemption,” Lynn remarked. “I urge the IRS to act swiftly to correct this injustice.”
Liberty University, in turn, plans to file a complaint against Americans United. It accuses the group of trying to silence churches and other conservative organizations by intimidating them.
Mat Staver, founder and chairman of the Liberty Counsel and dean of the Liberty University School of Law, said Liberty’s action had nothing to do with favoring one party over another: “Liberty will not lend its name or funds to support any group -- Republican, Democrat, Independent or non-political -- that supports abortion or same-sex marriage," he said.
Staver said Liberty, as a private institution, can decide to lend its name or fund student groups of its own choosing. "Liberty has complete freedom to officially recognize or not recognize any club, especially when the decision is based on its core mission.”
He also said Liberty is not endorsing or opposing political candidates.
“Had Barry Lynn paid more attention to the facts rather than being absorbed in his fundraising scheme, he would have realized that the Democratic club can still meet on campus. It simply cannot use Liberty's name or funds to promote abortion or same-sex marriage,” Staver said.
Staver said Lynn's complaint to the IRS is based upon "heresay” and “misinformation,” including reports that College Democrats had been “banned” from campus and that Liberty has said a person can’t be both a Democrat and a Christian.
All of it is “false,” Staver said.
Liberty University Chancellor Jerry Falwell, Jr. said the action against Americans United has been a long time coming.
"Americans United has a history of filing complaints like this against Liberty University and conservative churches and organizations. We are not aware of any adverse action resulting from these complaints. We've always been careful to abide by all the laws and regulations of the Internal Revenue code," Falwell said.
Staver said Liberty is “fighting back” and will file a complaint against Americans United on June 1, “showing their long history of their biased complaints with the IRS. We will point out the biased and partisan history.”
See earlier story:
Liberty University Fires Back at Liberal Media for Falsely Reporting It ‘Banned’ College Democrats (May 28, 2009)