The Indianapolis Baptist Temple (IBT) is an Independent Baptist church based in Indianapolis, Indiana, United States. It faced trouble with the Internal Revenue Service in the mid-1990s over its position that churches are not subject to tax laws of any kind.
IBT was founded in March 1950, and later that year it obtained legal status as a not-for-profit corporation.
In 1955, Rev. Gregory J. Dixon, then only 23, became pastor. During the next 20 years, IBT grew by about 300 members a year, according to the Polis Research Center at IUPUI. The congregation was at its peak during the 1970s, when it had as many as 8,000 members. In 1977 the BBC documentary series The Long Search used the IBT and Rev. Dixon to represent Christian fundamentalism in the program entitled Protestant Spirit USA. The series was broadcast in the United States on PBS and served as the basis of religious philosophy courses worldwide. By the 1990s, when IBT began having problems with the IRS, active membership was estimated at 2,500 to 3,000.
IBT also began what it referred to as "Outreach Ministries": Indianapolis Baptist School (K-12), a daycare, and a bible college. The schools and daycare were primarily located within additions to the main building, and used rooms throughout the church structure. For a short time period during the late 70s, the elementary school was housed within a building on Southport Road just a few doors west of the church's new location. The college closed several years prior to the seizure of the property, but the other 2 programs remained until the last month of the dispute. During the second half of the 1980s, Greg A. Dixon, (then listed as Associate Pastor), acted as Principal of the school. The daycare and school were the principal employers, as the church itself had mostly volunteers. However, since the programs were not considered to be actual functions of the church, this may have weighed heavily in the judges' decisions. The church attempted to deflect this issue by claiming that all employees were self-employed subcontractors and therefore responsible for their own taxes.
In 1983, Dixon decided that IBT should break all ties with the government. Thus, IBT dissolved its legal corporate status and began operating as an unincorporated religious society. In 1986, IBT changed its charter from an unincorporated religious society to what it called a "New Testament Church", claiming that no entity of the federal government had any oversight of its operations. From that point forward, the church paid no taxes and filed no tax forms with the IRS.
Though churches are not subject to income tax, they must also withhold income tax on wages paid to their employees. In addition, churches must also withhold Social Security and Medicare taxes from employees' wages and also pay the employer's share. Ordained ministers are exempt from income tax and may also opt out (within a certain time frame) from Social Security and Medicare taxes; however, other church employees are not eligible for this tax treatment. IBT took the position, however, that once it dissolved its corporate status, it was no longer required to withhold and pay taxes. It further contended that it had no "employees", only "ministers" who under existing IRS law were exempt from taxes.
Eventually the IRS noted that IBT had not paid any employment taxes nor filed any required forms, and on January 13, 1994 the IRS prepared Forms 941 (quarterly employment tax returns) for IBT for the years 1987 to 1993 and sent them to IBT for approval. When IBT returned the letter, marking it "Return improper venue – federal Regional venue denied", the IRS filed liens against the church totaling $3.6 million in April 1994, as well as liens against Dixon for unpaid federal income taxes totaling $31,052.
On May 8, 1995, the IRS revoked the church's tax-exempt status; the Indiana Department of Revenue followed suit on July 7 of that year.
IBT still took no action to clear its tax debt; thus, in 1996, the government seized 20 acres (8.1 ha) of church-owned land near Geist Reservoir, and sold the land at auction to Traverse Inc. for $172,000 in partial satisfaction of the tax debt.
On April 13, 1998, the United States sued IBT, Dixon, and the church's bank in the United States District Court for the Southern District of Indiana. The suit sought payment of what was then a $5.1 million tax debt, or foreclosure on the church's property. Judge Sarah Evans Barker heard the case. IBT's main argument was that the employer ID number on the IRS returns was that of the dissolved corporation, not the now unincorporated "New Testament Church", and therefore the assessments were improper. Barker did not agree with IBT's argument and ruled against IBT on June 29, 1999.
The church appealed Barker's ruling, and the case went to a three-judge panel of the Seventh Circuit Court of Appeals, which ruled against the church on Aug. 14, 2000.
On September 6, Barker gave the church ten days to show cause why foreclosure should not begin. IBT did not respond to the show cause notice; thus, on September 28, Barker issued the order to vacate.
On the night of November 14, 2000, more than 600 IBT members and supporters waited at the church facility for the marshals to arrive.
The night passed without incident and several more days went by as supporters continued their vigil and the marshals stayed their hand. Both sides wanted the stand to end peacefully, and had even talked about how that could be done.
On January 16, 2001, the U.S. Supreme Court declined to hear the church's appeal, thus leaving IBT with no further course of appeal.
Finally, on February 13, 2001, at 8:40 AM local time, U.S. Marshals finally came to foreclose on the property. The marshals kept their pistols holstered; five church members who refused to leave the building were carried out on stretchers, but were not arrested. U.S. Marshal Frank J. Anderson was commended for his handling the stand, and the peaceful way in which it was brought to an end.
Property belonging to the church, including furniture and books, was sold at auction on March 23 at Baxter Auction Gallery in Indianapolis.
In addition to the church's tax debt, Dixon continued to face a personal debt for income taxes the government claims he failed to pay from 1983 to 1986. On July 24, 2001, Judge Barker issued an order imposing a tax judgment of $136,610.04 against Dixon. It is not known whether Dixon has ever paid this debt.
Despite all the turmoil, IBT did not disband, and still holds regular worship services today. It also sponsors seven other Indianapolis area churches (which it calls affiliates) and has stated a goal of operating 25 churches throughout the Indianapolis area.
In 1996, Dixon's son, Rev. Gregory A. Dixon, assumed the mantle of Senior Pastor from his father.
IBT hosts the Unregistered Baptist Fellowship, which promotes its views regarding the relationship between churches and the IRS.
The property which was seized is now the Christel House Academy, a charter school. The old school section of the building was renovated and modernized, while the sections of the building that were once church auditoriums were razed. The portion of the property which was once known as Columbia Park is no longer accessible to the public.