Church Tax Inquiry and Examination Protections

§ 7611. Restrictions on church tax inquiries and examinations(a) Restrictions on inquiries(1) In generalThe Secretary may begin a church tax inquiry only if—(A) the reasonable belief requirements of paragraph (2), and (B) the notice requirements of paragraph (3), have been met. (2) Reasonable belief requirementsThe requirements of this paragraph are met with respect to any church tax inquiry if an appropriate high-level Treasury official reasonably believes (on the basis of facts and circumstances recorded in writing) that the church—(A) may not be exempt, by reason of its status as a church, from tax under section 501(a), or (B) may be carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities subject to taxation under this title. (3) Inquiry notice requirements(A) In generalThe requirements of this paragraph are met with respect to any church tax inquiry if, before beginning such inquiry, the Secretary provides written notice to the church of the beginning of such inquiry. (B) Contents of inquiry noticeThe notice required by this paragraph shall include—(i) an explanation of—(I) the concerns which gave rise to such inquiry, and (II) the general subject matter of such inquiry, and (ii) a general explanation of the applicable—(I) administrative and constitutional provisions with respect to such inquiry (including the right to a conference with the Secretary before any examination of church records), and (II) provisions of this title which authorize such inquiry or which may be otherwise involved in such inquiry. (b) Restrictions on examinations(1) In generalThe Secretary may begin a church tax examination only if the requirements of paragraph (2) have been met and such examination may be made only—(A) in the case of church records, to the extent necessary to determine the liability for, and the amount of, any tax imposed by this title, and (B) in the case of religious activities, to the extent necessary to determine whether an organization claiming to be a church is a church for any period. (2) Notice of examination; opportunity for conferenceThe requirements of this paragraph are met with respect to any church tax examination if—(A) at least 15 days before the beginning of such examination, the Secretary provides the notice described in paragraph (3) to both the church and the appropriate regional counsel of the Internal Revenue Service, and (B) the church has a reasonable time to participate in a conference described in paragraph (3)(A)(iii), but only if the church requests such a conference before the beginning of the examination. (3) Contents of examination notice, et cetera(A) In generalThe notice described in this paragraph is a written notice which includes—(i) a copy of the church tax inquiry notice provided to the church under subsection (a), (ii) a description of the church records and activities which the Secretary seeks to examine,