IRS investigating BP’s Living Word Christian Center

27 Aug 2008 // Living Word Christian Center Pastor Mac Hammond said he welcomed an IRS audit last year.

Now he’s got one.

The Brooklyn Park church has not submitted the documents requested by the federal agency, and an IRS investigation is under way.

Living Word Christian Center (LWCC), 9201 75th Ave. N., Brooklyn Park, has a congregation of about 9,000 people statewide through on site, televised and online services.

The church’s finances came under scrutiny in February 2007, after Citizens for Responsibility in Ethics (CREW) filed a complaint.

The watchdog group alleged Living Word entered into loan and lease agreements with Hammond that personally benefited the pastor, who also serves as a board member.

Tax law prohibits insiders, such as board members, from benefiting from a charitable, nonprofit organization.

LWCC admitted the church leases planes owned by Hammond and pays him to hangar these planes. The church also indicated it had loaned money to the pastor, and subsequently forgave portions of the debt, according to U.S. District Court documents filed in July.

The IRS is attempting to determine “if the series of leases, loans and debt forgiveness, when combined with wages and other compensation, provide an economic benefit to Rev. Hammond that exceeds the value of the services he performs for the church,” according to the documents.

In a letter to his congregation Aug. 23, Hammond said all monies he and his wife Lynne have ever taken from the church have been approved by the Board of Directors in accordance with the IRS Guidelines for Ministerial Compensation.

“We believe that this investigation of the IRS is completely unfounded and politically motivated,” he said in the letter. “Our books are clean and we have done what the IRS requires of a nonprofit organization.”

In March this year, the IRS issued a summons requesting financial documents from January 2004 to December 2006. The documents detail meetings, ledgers/journals, promissory notes, compensation documents, expense reports and more.

In a letter dated April 4, the attorney representing LWCC said the church did not intend to “comply in any respect” with the summons.

The church contends the IRS official who approved the investigation - the IRS director of exempt organizations examinations - is not a “high-level Treasury [Department] official.”

The IRS petitioned the District Court for enforcement, and the court issued an order to show cause on Aug. 12.

Hammond said the church intends to file a response, and the issue will be heard Oct. 2. Hammond also indicated he would address the audit during his Aug. 30 and 31 sermons.