Pat Robertson’s Charity Pays Fine to IRS

The Christian Broadcasting Network has announced that it has agreed to pay a substantial penalty to the Internal Revenue Service and relinquish its tax-exempt status for 1986 and 1987, apparently because of political activity related to the failed 1988 Presidential bid of its founder, Pat Robertson.

CBN called the penalty “a significant payment” but kept the amount secret. The I.R.S. declined to comment on the settlement, citing confidentiality rules.

The two-year exemption loss stems from “rules prohibiting intervention in political campaign activities,” CBN said in a carefully worded release. The agreement does not disqualify the deductibility of donations during that period, the organization said.

The settlement, which relates to tax rules barring political-campaign activities by charities, comes after a 12-year I.R.S. audit.

In the mid-1980s, CBN reportedly gave millions of dollars to a former affiliate, the Freedom Council, to mobilize Christian voters in support of Mr. Robertson’s Republican candidacy.

The agreement retroactively strips the tax-exempt status of the Freedom Council and two other former CBN affiliates, the National Perspectives Institute and the National Freedom Institute. All three groups closed in 1986.

Patty Silverman, a CBN spokeswoman, described the affiliates as “public-interest organizations” that were established “to encourage Christians to participate in government.” The groups were “totally separate” from Mr. Robertson’s campaign, she said.

“We believe the three organizations were a proper part of CBN’s religious mission,” she said. “The I.R.S. disagreed.”

As part of the settlement, CBN agreed to refrain from campaign activities barred by Section 501(c)(3) of the Internal Revenue Code, to increase the number of outside directors on its nine-member board, and to make other changes “to ensure ongoing compliance with the tax laws.”

The number of outside directors on CBN’s board already has been increased to five, the organization said.

In prepared remarks, Mr. Robertson said that the agreement “permits CBN to get on with its worldwide Christian ministry while satisfying the legitimate concerns of the I.R.S.”

The CBN release makes no mention of a separate Federal Election Commission case involving the Christian Coalition, which Mr. Robertson also founded, or a pending I.R.S. decision about the coalition’s tax-exempt status.

The coalition has been seeking status as a “social-welfare” group under Section 501(c)(4) of the tax code since the group’s formation in 1989, a spokeswoman said. Such status would allow it to devote much of its resources to lobbying and getting involved in political campaigns but prohibit it from receiving tax-deductible contributions.