IRS Seizes Shiloh Retreat Center

The ministry of the Shiloh Youth Revival Centers, later known as the Shiloh Retreat Center, is no more. On February 26, the last of the property that belonged to the community, which had ministered to thousands of young people since 1968, was seized by the Internal Revenue Service (IRS).

Shiloh's confrontation with the IRS began in 1980, when the agency decided that the community owed taxes on income received in 1977 and 1978. The IRS said that a portion of Shiloh's earnings from that period was not "substantially related" to the purposes for which the community had been granted tax-exempt status. The U.S. government, said Joe Peterson, administrator of Shiloh, is "attempting [through the IRS] to define what is acceptable religious practice."

Shiloh's origins lie in the Jesus Movement that swept the United States in the late 1960s and early 1970s. Founded by four members of a Pentecostal church in Costa Mesa, California, Shiloh's ministry from the start was one of evangelizing, particularly among disaffected youth. Shiloh reached out to drug addicts and homeless people, as well as young people who were conscientious objectors to the Vietnam War.

"We knew how to talk to people who were on drugs," said David Stewart, an early member of the community. One of the homeless youth that Shiloh's ministry touched, Stewart is now a pastor in Salt Lake City, Utah.

In 1969 a team of 30 people took the ministry from California to Oregon. "We started a commune to give youths who came to Christ at rallies a place to live," said Stewart. At first the ministry was funded by donations, but members soon decided that they should "work for its support and not beg for it," as the final Shiloh newsletter put it in 1987.

The Shiloh ministry began to introduce work projects into its program, and its Christian evangelization was complemented by rehabilitation projects. In time, participants at Shiloh were being organized into work teams that were involved in canning, construction, forestry, planting, painting, landscaping, and running a medical clinic. Its leaders sought out work projects that would allow their communal commitment to evangelization to be pursued more comprehensively, both at work and at home.

The work of Shiloh expanded rapidly, and by the mid-'70s the community was "one of the largest Christian communities," with 75 centers in more than 30 states where young people across the United States could find a place to live, repay debts, undergo rehabilitation, and strengthen their Christian faith, Peterson said.
But after this period of expansion, internal conflicts arose, and Shiloh's national outreach shrank. By 1979, the work of Shiloh was limited to its property outside Eugene, Oregon, and its focus was on offering hospitality and spiritual retreats.

WARNING SIGNALS THAT the IRS was curious about the Shiloh Center's earnings came in 1977 in the form of a letter "suggesting that we might have problems," said Stewart. The IRS was interested in the income generated by the work teams operating outside the community in 1977 and 1978. In 1980 the agency decided the income was unrelated to the center's religious purposes and was, therefore, subject to taxation.

Court proceedings began, and in March 1987 the U.S. Federal Tax Court ruled in favor of the IRS. Earlier this year the Shiloh Center lost its final appeal. The back taxes the center owed for the two years were $700,000, and with interest on the debt included, the bill totaled $1.7 million. Peterson said Shiloh will make no further appeals because it has no money—all its funds were drained by the last eight years of legal battles.

James Richardson, a sociology professor at the University of Nevada at Reno, has studied the religious organizations that grew out of the late '60s and early '70s, often referred to as "new religious movements." According to Richardson, the IRS prosecution of Shiloh's activities is partly due to the inability of the government, as well as society, to understand these groups.

The government, through the IRS, evaluates the claims of organizations seeking tax-exempt status on religious grounds. Richardson believes there must be some criteria for evaluation, but "new groups have no history," unlike the more established Catholic religious orders. "It's a mark against you in the IRS' eyes," he said.

Richardson also pointed out that after the mass suicide of the followers of Rev. Jim Jones in Guyana in 1978, the U.S. government was pressured to crack down on organizations, particularly cults, that claimed religious status in the eyes of the state. "The IRS seems to be the point organization for overall governmental policy," said Richardson.

Richardson, Peterson, Stewart, and others fear the impact on religious organizations and religious activities. Several churches and religious organizations across the country have been prosecuted on similar grounds, and trends appear ominous for non-profit organizations, Catholic religious orders, and neo-monastic groups and communities that were born in the '60s and '70s.

"The law that was set up to protect the church from the state is eroding," says Stewart, who fears that "this trend could work itself out in 40 years or so such that there'd no longer be any protection for the church from the state."

Joe Lynch was assistant editor of Sojourners when this article appeared.