Supreme Court Rejects Church's Plea

The Associated Press/January 16, 2001

Indianapolis -- The Supreme Court on Tuesday cleared the way for the federal government to seize the Indianapolis Baptist Temple for a tax debt. Church supporters call the case one of religious persecution.

The court, without comment, refused to accept the church's argument that to preserve its religious freedom it does not have to withhold Social Security, Medicare and income taxes for its workers.

The church owes about $6 million in back taxes and penalties and has faced the threat of seizure by federal marshals since Nov. 14 under an order from U.S. District Court Judge Sarah Evans Barker.

Pastor emeritus Greg J. Dixon says his church is an independent congregation governed only by God's law and thus not subject to any form of taxation. He also believes taxing a church is a violation of the First Amendment separation of church and state, and he refuses to register for tax-exempt status.

Registered churches are exempt from certain taxes, but still must pay employee withholding taxes. Church members say that those working at the church have paid their federal tax obligations, and add that the government actually collects more taxes from the Baptist Temple than it would if the church were a tax-free entity.

For instance, unlike most churches, the Baptist Temple pays sales taxes on all purchases and its members cannot claim income tax deductions for their donations.