From The Columbus Dispatch:
A group of Columbus pastors is asking the Internal Revenue Service to investigate whether certain members of Congress owe taxes and penalties on cut-rate rent from a Washington boarding house that has a tax exemption as a church.
If the members did pay below-market rental rates to the C Street Center and did not report it as income, “then the members may have significant unreported income-tax liabilities,” the pastors say in a complaint filed yesterday with the IRS.
“We’re saying to the IRS that if something of benefit is being paid to members of Congress under the cover of a church, then that should be reported and taxed,” said the Rev. Al Debelak, senior minister at Redeemer Lutheran Church in Columbus.
He and 12 other pastors from mainstream Christian denominations filed a complaint with the IRS on Feb. 23 challenging the tax-exempt status of the C Street Center, a red-brick house at 133 C St. SE, just a short walk from the Capitol.
In yesterday’s supplement to the February complaint, the pastors cite a published report that, in 2009, members of Congress living at the C Street Center paid $950 per month in rent. Comparing the C Street Center to a small hotel or a bed-and-breakfast – it has 12 furnished bedrooms, nine bathrooms, five living rooms and housekeeping services – the pastors said the center is charging well below market rent to the members.
Hotels and other boarding houses offering amenities similar to the C Street Center’s with roughly the same proximity to the Capitol charge between $4,500 and $7,500 a month, according to the complaint.
Marcus Owens, former director of the IRS tax-exempt division and a Washington-based attorney representing the pastors, estimated that members of Congress living at the C Street Center last year received a subsidized rental benefit valued at as much as $70,000 a year. Tax laws, he said, count below-market value rent as income to the recipient that must be reported on annual income-tax filings.
“The tax bill could get fairly hefty for those individuals who have been residents for several years and who failed to report,” he said.
Owens said that congressional members who have lived at the C Street Center also could run afoul of ethics rules that preclude them from accepting gifts exceeding $50.
According to the complaint, members of Congress who lived at C Street in 2009 included U.S. Reps. Zach Wamp, R-Tenn.; Bart Stupak, D-Mich.; and Mike Doyle, D-Pa.; and Sens. John Ensign, R-Nev., and Tom Coburn, R-Okla.
The C Street Center has been linked to a secretive evangelical Christian network called the Fellowship Foundation, also known as the Family, whose headquarters is in Arlington, Va.
After the Columbus pastors filed their IRS complaint in February challenging the center’s tax exemption as a church, Richard Carver, president of the Fellowship Foundation, told The Dispatch that his charitable organization does not own the C Street Center and it “is simply not a part of anything we do.”
But a property deed on the C Street Center in 2009 was signed by Marty B. Sherman, secretary of the center. On 2007 federal tax forms filed by the Fellowship Foundation, Sherman is listed as one of the five highest-paid employees of the foundation, and on 2006 and 2007 tax forms the Fellowship Foundation listed the C Street Center as an affiliated organization.
The Rev. Eric Williams, pastor of the North Congregational United Church of Christ on W. Henderson Road and a leader of the 13 pastors, expressed concern that the Fellowship Foundation is co-opting members of Congress to support its political agenda by offering cheap rent at the C Street Center.
“With favors come expectations,” Williams said. “I have to believe that this is about influencing public policy. It sounds like, seems like and smells like lobbying to me.”