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"This is where social aspects of the tax code intrude on the political," he says. "For a number of years, policy makers believed religious organizations deserved special considerations with the tax code."
"I've heard talk about this, but no one wants to be anti-church. It's bad politics," says Bob McIntyre, director for Citizens for Tax Justice, a Washington, D.C.-based tax reform group that calls itself a "middle of the road" group in favor of progressive taxation. The group is funded in part by labor unions.
"I think it would think it would take quite a scandal [to reform the law]," McIntyre says.
"This doesn't hit the radar screen in Congress."
"Officially we really don't take too much position on that kind of fraud issue," says Peter Cleary, communications manager for Americans for Tax Reform, a conservative group, and one of about 70,000 taxpayer groups that oppose increases in taxes and are active in lobbying for tax-code reform.
He says the IRS should treat all taxpayers as leniently as it treats religious foundations.
"We would love it if all taxpayers were treated that well," he says. "Auditing is a horrible experience in this country."
"There is a distinct separation of church and state," says Cleary.
Paul Nelson, director of the Evangelical Council for Financial Accountability, a voluntary self-policing group of 750 religious foundations and organizations based in Washington, D.C., is also against reforming tax law so that the IRS can more closely monitor religious organizations.
But he doesn't deny such light monitoring creates opportunities for fraud.
"There are constitutional protections that have been put in to protect freedoms that we all cherish," says Nelson.
"We don't want to ever let those freedoms go. But what that does, especially as it relates to the separation of church and state, is that constitutional protections make religious entities a rather lightly regulated industry."
A generous public and a lightly regulated industry provide the "opportunity for fraud in religious areas," he says.
He believes organizations like his are preferable to more IRS enforcement, but he allows that voluntary organizations don't usually include religious foundations out to defraud the public.
"Not everybody has to join," he says. "And so you can run into circumstances where people aren't really accountable.
"When people aren't accountable, that doesn't make them bad, but it does make them prone to all sorts of temptations."
--Terry Greene Sterling