The Director of IRS Exempt Organizations (currently Lois Lerner) has been given the authority to sign off on church tax inquiries, according to proposed rules issued by the IRS on July 31. The guidance will replace references to IRS positions abolished by the IRS Restructuring and Reform Act of 1998. The update arose in light of the statutorily mandated IRS reorganization and the elimination of internal revenue regions. Under Code Section 7611, the IRS is permitted to begin an inquiry into whether a church qualifies for tax exemption, or whether it has a liability for unrelated business income tax, only if “an appropriate high level Treasury official” first “reasonably believes,” on the basis of facts and circumstances, that the church may not be exempt under Section 501. This “official” was interpreted to mean an IRS regional commissioner or higher level official but, since these positions have been abolished, the Exempt Organizations Director may now sign off. Commentators and a Minnesota U.S. District Court continue to question whether the position is high-ranking enough to make the reasonable belief determination.