Judge won't halt summons in IRS probe of God's Storehouse, run by Topeka Sen. Rick Kloos
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A federal judge dismissed Friday an effort by the pastor of God's Storehouse, who is also a state senator, to block Internal Revenue Service access the church's bank records as part of an ongoing investigation.
The probe into God's Storehouse stretches back to June 2021 but became public last year after attorneys representing the church sought to block summons for financial and credit card records.
Sen. Rick Kloos, R-Berryton, serves at the pastor of God's Storehouse, and controversially used the church's branding in his campaign materials during a successful run for the Senate in 2020.
God's Storehouse is a thrift store and coffee shop near S.W. 21st Street. It also holds worship services on major holidays, according to its website. Other Sundays, the church holds services at a nearby hotel.
The investigation covers four main areas pertaining to God's Storehouse, according to a sworn declaration filed by Internal Revenue Agent Kesroy C. Henry. Henry's attempts to secure God's Storehouse bank records from Kaw Valley Bank, he argued, were important to the probe.
That includes whether the church failed to withhold employment taxes on wages paid to Kloos and his wife in 2019 and 2020, despite withholding taxes from other employees.
Also at issue is whether the church is primarily a thrift store and thus should be forced to register as a different category of nonprofit and whether taxes were paid on revenue from the building's coffee shop, which could be deemed extraneous to the church's mission and thus subject to taxation.
And Henry wrote the investigation also was examining whether the church "may have engaged in prohibited political campaign intervention in 2020" as part of Kloos' 2020 Kansas Senate run.
More:Topeka-area senator Rick Kloos pushes back as IRS questions tax-exempt status of God's Storehouse
Ryan Kriegshauser, the attorney for Kloos and God's Storehouse has contested these claims and has argued that the investigation was sparked by a 2020 Topeka Capital-Journal article where Kloos' then-opponent raised concerns about the permissibility of campaign signs that used the God's Storehouse logo.
Allowing that investigation to continue unimpeded, he said in a statement, would amount to the politicization of the IRS' work.
"The IRS should not be allowed to circumvent federal law or be weaponized by anti-religion interests," Kriegshauser said, arguing the case is about "the constitutional protections afforded to churches' religious activities."
But U.S. District Court Judge Daniel Crabtree dismissed that argument in his ruling.
"Nothing petitioner has presented merits a plausible inference that the IRS carried out its investigation because of someone else’s political motivation," Crabtree wrote. "Its evidence doesn’t demonstrate that Agent Henry or anyone else at the IRS acted with a political motive."
God's Storehouse also argued that the summons should be dismissed as the audit was improperly authorized, as the position outlined in statute as being required to sign off on the audit no longer exists in the IRS hierarchy.
And they have maintained that federal law should shield banking records from being reviewed, except in relatively narrow circumstances.
Crabtree, however, rejected both lines of rhetoric in his ruling.
"The court reaches this conclusion because petitioner hasn’t shouldered its burden to demonstrate that respondent didn’t act in good faith when it issued the third-party summons," he said.
Kriegshauser said they were discussing the possibility of an appeal with their client and were "committed to continuing the fight on these important issues."
The fight over the permissibility of a separate summons seeking records from a Denver-area company that processes credit card transactions of the church's thrift store remains ongoing.
This article originally appeared on Topeka Capital-Journal: Rick Kloos' God's Storehouse blocked from stopping IRS summons
