A federal court upheld the IRS decision to revoke the tax-exempt status in April 1999 and the decision was appealed to the U.S. Court of Appeals for the District of Columbia Circuit. While the appellate court upheld the lower court ruling that the IRS had the authority to revoke the church's tax-exempt status, it provided some important guidance on this issue. The Church at Pierce Creek is not liable for taxes. Even though the Church at Pierce Creek had its tax-exempt status revoked, it is not liable for taxes on donations given to the church. The Church at Pierce Creek can reapply for official recognition as a tax-exempt organization.
Churches now have an alternate means to engage in campaign speech.
For the first time, the District of Columbia Circuit Court of Appeals has stated that churches have a method of engaging in campaign speech activity. The ACLJ has not yet decided whether it will appeal today's decision by the U.S. Court of Appeals for the District of Columbia Circuit to the U.S. Supreme Court. The American Center for Law and Justice is suing the IRS on behalf of the Christian Coalition alleging that the tax agency's rejection of the Coalition's tax-exempt status was discriminatory and unconstitutional. The lawsuit was filed in U.S. District Court in Norfolk, VA in February 2000.