WilmerHale to Represent Church in Tax Probe Sparked by Obama Speech

, The National Law Journal

Washington's Wilmer Cutler Pickering Hale and Dorr has agreed to represent the United Church of Christ on a pro bono basis in an Internal Revenue Service investigation of the church's tax-exempt status.

The IRS initiated the tax inquiry on Feb. 20 in response to a speech given by U.S. Sen. Barack Obama, D-Ill., a member of the church, at the UCC's national General Synod last June.

Former Solicitor General and WilmerHale partner Seth P. Waxman will lead the firm's team of attorneys that includes: Randolph D. Moss, co-chair of WilmerHale's government and regulatory litigation practice group; William J. Wilkins, chair-elect of the American Bar Association's Section of Taxation and a fellow of the American College of Tax Counsel; Brian J. Menkes, former chair of the D.C. Bar Association Taxation Section, Exempt Organizations Committee; and Donald C. Clark, the UCC's nationwide special counsel.

"I am confident that, when the IRS learns all the relevant facts, it will conclude that the General Synod of the United Church of Christ did not come close to conducting political campaign activity at its 2007 gathering," Waxman said, adding that there is a bigger issue affecting faith communities in general.

"The IRS must proceed with great care and sensitivity to the First Amendment when it initiates an investigation in reaction to a speech at a religious event; and, when it learns that there is no basis to proceed, it must announce that conclusion quickly and clearly," said Waxman. "We hope that the IRS does so here."

The IRS does not comment on investigations because of the confidentiality of tax information, according to the agency. However, in notifying the UCC of the tax inquiry, the agency said "a reasonable relief" exists that the church had engaged in political activities that could jeopardize its tax-exempt status. The agency said it was concerned about articles posted on the church's Web site and on other sites stating that Obama had spoken to nearly 10,000 people at the event, and also that Obama volunteers reportedly had staffed campaign tables "outside the center to promote his campaign."

The law firm said it would not charge the church for its attorneys' time, prompting church leaders to halt further appeals for a newly created "UCC Legal Fund," an online effort that raised $59,564 in less than a week.

It was expected that the UCC's legal challenge easily could exceed the six-figure mark.

"While we know there will be other significant expenses associated with our defense, we are profoundly grateful to WilmerHale for offering its attorney time without the customary hourly fee," said the Rev. John H. Thomas, UCC general minister and president. "Thanks to the immediate and generous outpouring from our members and supporters, we now believe we will have sufficient resources to cover other related legal costs.

UCC's special counsel Clark added, "Since this inquiry was initiated, the United Church of Christ has received countless offers of legal assistance from extremely well- qualified attorneys and law firms throughout the country. We are encouraged by the legal community's recognition of the importance of the issues at stake. We appreciate all of the offers of support we have received, and have selected outstanding counsel to bring forward the facts that will resolve this matter."