RELIGION : IRS Seeking Revocation Of PTL Tax Status

SPARTANBURG, S.C. —  An attorney for the Internal Revenue Service told a federal appeals court that the agency wants to revoke PTL’s tax-exempt status, even if it means the end of the financially troubled ministry.

“I don’t understand why the IRS doesn’t take a more practical approach to this,” Judge William Wilkins of the 4th U.S. Circuit Court of Appeals on Thursday told the lawyer, Francis Allegra.

Allegra replied, “The importance here is not just in this case, but it will be felt in other cases.”

Wilkins was part of a three-judge panel that heard an appeal from the Fort Mill-based ministry to an earlier U.S. district judge’s ruling permitting the IRS to revoke the ministry’s tax-exempt status. Earlier this month, Wilkins granted a stay of that ruling pending review by the appeals court, which is expected to make its decision within two weeks.

The IRS seeks to make the revocation retroactive to May 31, 1981. It contends that contributions funded the lavish lifestyles of ministry founders Jim and Tammy Bakker, who resigned after a scandal over a sexual encounter Bakker had with former church secretary Jessica Hahn, and that much of PTL’s Heritage Village USA operations were commercial in nature.

PTL attorney R. Bradford Leggett told the judges that loss of its tax-exempt status would jeopardize the ministry’s ability to reorganize itself under federal bankruptcy court protection by a May 1 deadline.