IRS Move Spurs Trustee Effort to Recover Payments to Bakkers

PTL’s trustee will take action to recover what the Internal Revenue Service says is $9.36 million in excessive compensation paid to Jim and Tammy Bakker, an attorney for the television ministry’s trustee said Friday.

R. Bradford Leggett, an attorney in Winston-Salem, said he and David W. Clark, the ministry’s Chapter 11 bankruptcy trustee, are conducting their own investigation of the excessive payments.

The IRS filed reports on excessive compensation Dec. 16 in U.S. Bankruptcy Court to support its argument for revocation of PTL’s tax-exempt status. The IRS contends that PTL owes $62 million or more in taxes from June, 1983, to June, 1987.

The IRS filing, reported by the Winston-Salem Journal, said top PTL officials received $14.86 million in excessive compensation between 1981 and 1987, of which $9.36 million went to the Bakkers.

The IRS report said the “amounts paid to or assets transferred to or for the benefit of Jim Bakker more nearly resemble the distribution by a wholly owned corporation of its net earnings as a dividend to its shareholder rather than as a compensation for services actually provided.”

In return for the privilege of tax exemption, federal law prohibits churches and charities from allowing individuals to take money except as reasonable payment for goods or services.

Leggett said the Bakkers, who founded PTL and resigned last year, collected the excessive pay and benefits without the approval or knowledge of the PTL board.

James Toms, an attorney in Hendersonville, N.C., who represents the Bakkers, said Friday that he had not seen the report and could not comment on it.