IRS Withdraws Tax-Exempt Status of PTL Ministry

The Internal Revenue Service revoked the tax-exempt status of the PTL television ministry Friday and said contributions to the financially troubled organization are no longer tax deductible.

PTL officials, who are trying to reorganize the ministry in U.S. Bankruptcy Court in Columbia, have said the tax-exempt status is essential to PTL’s survival because it depends on tax-deductible contributions to operate. PTL has a theme park and a cable television network based in Ft. Mill.

$55-Million Claim

The IRS claims PTL owes more than $55 million in taxes from June, 1983, to June, 1987, the month PTL filed for protection from creditors because of $72 million in debts, not counting the IRS claim.

The announcement by the IRS office in Atlanta follows a federal appeals court ruling Wednesday dissolving a preliminary injunction that had prevented the IRS from revoking the tax-exempt status.

“We felt the organization has not operated within the guidelines . . . in its original charter,” Les Witmer, a spokesman for the IRS regional office, said Friday.

An IRS report in December concluded that PTL founders Jim and Tammy Faye Bakker and their aides profited excessively from donations to the ministry. The IRS also said much of PTL’s Heritage USA theme park operations were commercial rather than ministerial.

PTL had “excessive unrelated business income or income which was not really in keeping with the tax-exempt purpose,” Witmer said.

The Bakkers received $10.7 million in their last seven years with the ministry, $9.4 million of which was excessive and unreasonable, the IRS report said.

Bakker resigned March 19, 1987, when a story was about to break that he had had sex with former church secretary Jessica Hahn in 1980 and that the ministry had paid her $265,000 in hush money.

The IRS action means individuals sending money to PTL will not be allowed to claim future contributions as a tax deduction. But PTL attorney R. Bradford Leggett said the ministry is likely to appeal to the Court of Claims in Washington.

If PTL appeals, contributions by individuals would still be deductible up to $1,000 until the appeal is decided, the IRS said.