Taxes haunt TV evangelism's best-known pair

IRS says Bakker, Messner owe $3 million from '80s

Baltimore Sun/October 13, 2002

Charlotte, N.C. -- They survived national scandal, married new partners and started new lives, but TV evangelism's best-known couple - Jim Bakker and Tammy Faye Messner - remain haunted by IRS demands for $3 million.

The Internal Revenue Service says Bakker and Messner owe personal income taxes from the 1980s when they were building their Praise The Lord empire. Their sprawling Fort Mill, S.C., theme park and retreat - Heritage USA - drew 6 million visitors at its 1986 peak. But the ministry collapsed after revelations of Jim Bakker's sexual encounter with a former church secretary. He later went to prison for bilking followers out of $158 million.

Usually, the IRS has 10 years to collect taxes, but recent court filings show the agency continues to demand Bakker and Messner pay the taxes, some more than 20 years old.

"It's a life sentence," said Char Graham, Jim Bakker's current mother-in-law. "He can't ever get out from under. It's become so overwhelming to even try and fight it."

The IRS assessed the taxes against the Bakkers after revoking the PTL ministry's nonprofit status, said Roe Messner, Tammy Faye's husband since 1993. That status allowed the ministry to provide the Bakkers with a housing allowance and other expenses, such as utilities, common benefits for clergy. Stripped of tax-exempt status, the benefits became personal income - and taxable.

For more than 15 years, the IRS has been trying to collect taxes it says the Bakkers owe from 1981 through 1986. As a normal part of the collection process, the agency had also filed liens against the couple.

With a lien in place, the IRS can seize assets, such as real estate and bank accounts to pay taxes. But Graham and Messner said there are no assets. Messner said they rent their home in Matthews, N.C.

"We don't have a clue what they're doing and don't plan to trouble ourselves with a call to find out," he said.

When the agency's 10-year collection period expires, liens usually expire, too. Court documents filed last month and in July in county courts in Charlotte, N.C., and York, S.C., indicate the IRS allowed the liens to "mistakenly" expire. The agency reinstated the liens.

Valerie Thornton, an IRS spokeswoman in Greensboro, N.C., said the agency does not often fail to file lien extensions. She said the agency doesn't track the number of such filings.

David Bunn, a former IRS revenue officer, said "It's an overworked, understaffed organization, and it is subject to human frailties."

Messner said, "It should be a nonissue because it's been more than 10 years. I don't know what kind of games they're playing."

Thornton said the conditions under which the agency extends collection beyond the 10-year period are confidential, and that the IRS would not comment on specifics of the case.

Charlotte tax lawyers Neal Fisher and Steve Horowitz said the rules for extending collection periods beyond the 10-year limit are complicated.

"Each case has its own circumstances that need to be looked at," Horowitz said.

Bunn, a Charlotte tax consultant, was with the IRS during the early years of its Bakker investigation and is familiar with the case. While he did not discuss specifics, he said "The PTL case was a major investigation involving the collection division, the examination division and the criminal investigation division as well as other federal agencies."

The size of the bill, he said, could explain the continuing collection effort. "The government, in doing its job appropriately, should be paying more attention to big dollars," he said.

Taxpayers often agree to give the IRS more time to collect past-due taxes, Thornton said. Messner says his wife never gave such authorization. Jim Bakker may have, said Graham, who works in his latest ministry in Branson, Mo.

Graham said IRS personnel visited Bakker soon after he went to prison, before courts drastically reduced his 45-year sentence. He recalls signing something but doesn't remember the details, she said.

"It was a tough time," she said in a telephone interview from Bakker's New Covenant Fellowship. "He thought he was in for 45 years."

Tax lawyer Fisher said such extensions used to be more common and sometimes people didn't understand what they were signing.

Graham and Messner said Jim Bakker and his former wife didn't want to talk about the tax issues and that neither would allow The Observer in Charlotte, N.C., to review the IRS files.

"We don't want to stir the pot," Messner said.

He said the original tax amount was about $500,000. Penalties and interest account for the rest of the bill. The notices reinstating the liens list "James O. and Tamara F. Bakker" as owing $3 million.