The IRS Is Demanding $325,000 From a Church That Only Has 20 Members — And the Gov't Could Do Something Drastic to Settle the Debt

It was all a paperwork mix-up, they say.

Members of Emmanuel Baptist Church in Topeka, Kansas, told the Topeka Capital-Journal this week that they never meant to break the law back in 2003, when a member of the church started running a daycare center for low-income families out of a church building.

That daycare center closed in 2007, and the woman who ran it no longer attends the church — but she apparently left a mess on the church's hands.

“She did not keep pay records and did not pay all the payroll deductions for employees,” said interim pastor Gary Roten. “Once this was discovered, the IRS came for payment from Emmanuel.”

She also mistakenly used the church's Employer Identification Number on employee W-2 forms, the church said.

Emmanuel Baptist Church's property in southeast Topeka, Kansas. (Image via Google Maps)

The IRS is apparently placing the blame for the unpaid taxes squarely on the church, which has shrunken from roughly 100 members in 2003 to around 20 now, the Capital-Journal reported.

The tax bill: $210,000 in payroll tax delinquencies and $115,000 in penalties.

With a meager $7,000 in the bank, it's unclear how the church could possibly pay the debt.

The IRS refused to discuss the case with the Capital-Journal, citing “strict privacy laws," and the church said the IRS has rejected all counter-offers.

The congregation fears the IRS could seize their property, something that the Capital-Journal noted had only been done once before in U.S. history:

Emmanuel Baptist Church’s property is valued on Shawnee County tax rolls at $721,910. Church leaders and members scoff at that amount, saying the church would fetch only a fraction of that amount on the market. A third-party appraisal of the church property placed its value at $261,500.

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Perhaps of greatest concern, church leaders said, the IRS “failed to consider that in the entire history of the United States, the government has only seized a church building once in 2001, which was the result of that church’s leadership refusal to pay employment taxes.”

The next meeting between the church and IRS is set for sometime in October in Kansas City, Mo. That meeting could determine the church’s ultimate fate. Members and leaders hope Emmanuel Baptist doesn’t become the second church in U.S. history to be seized by the IRS.

Despite the scope of the debacle, at least one church-goer isn't letting the problems impact her faith.

“It’s been going on for a long time,” 87-year-old Lois Fensler told the Capital-Journal. “I put it in the back of my mind quite a bit. I give it over to the Lord. I don’t really stress over it.”

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