Iowa church wages four-year fight with IRS over hallucinogenic-drug ceremonies

An Iowa-based church that allegedly charges members up to $800 to use a hallucinogenic drug in religious ceremonies is continuing to pursue a four-year battle to win tax-exempt status.

Last year, the Iowaska Church of Healing sued the IRS in U.S. District Court, challenging the federal agency’s decision to deny the church status as a nonprofit, tax-exempt organization.

State records indicate the church was formed in Iowa in September 2018, and is run by Admir Dado Kantarevic, along with Billy Benskin and Merzuk Ramic. Currently, the church’s official headquarters are Kantarevic’s former home in Des Moines, which Kantarevic sold in July.

According to court filings, the church originally intended to purchase land in Iowa for a “permanent worship facility and related structures,” with Florida serving as a potential secondary location. The church and its legal counsel say they ultimately decided to instead establish a physical location in Florida because Iowa, unlike Florida, has no state version of the federal Religious Freedom Restoration Act of 1993.

Court records indicate the church now has 20 members in Colombia, Sweden and six states, including Iowa.

IRS: Church members pay up to $800 each for ‘ceremonies’

Iowaska’s teachings are built around the use of ayahuasca, which is brewed from the leaves of the shrubs and vines found in the Amazon. Elements of those plants have powerful hallucinogenic properties, which the church says can be used to awaken “the Third Eye” of its followers.

In court filings, the church acknowledges that under the federal Controlled Substances Act, an ingredient of ayahuasca called dimethyltryptamine or DMT, is a Schedule I drug and a hallucinogenic alkaloid, and that there is no statutory exemption allowing for its use in religious ceremonies.

According to the federal government, prospective members of the Iowaska Church of Healing must complete a written membership application and pay a membership fee of $60. Members are then given the opportunity to pay for attendance at group ceremonies to consume the “Sacrament of Ayahuasca.”

Iowaska acknowledges that it held a total of five such ceremonies over three weekends in May, June and July of 2019. The IRS alleges members paid $333 each to attend the ceremonies, with additional “private ceremonies” offered at $800 each.

In January 2019, Iowaska filed an application with the IRS seeking tax-exempt status and was denied. After an appeal was filed, a final determination letter denying tax-exempt status was issued in June 2021, stating that the church’s use of the Sacrament of Ayahuasca in its religious practices was illegal.

In response to the church’s lawsuit seeking judicial review of that decision, the IRS told the court the denial “was made for multiple reasons,” including a finding that the church’s “activities are illegal under federal law and violate public policy,” and that it is “not a church or a convention or association of churches” as defined by federal tax regulations.

A trial date has yet to be scheduled in the case, and earlier this year both sides filed motions for summary judgment in their favor. The court has yet to rule on those motions.

In their most recent court filings, lawyers for the IRS told the court that “even if Iowaska had other tax-exempt purposes and activities, the presence of a single, non-exempt purpose — in this case, the distribution of ayahuasca — is substantial and has destroyed its exemption.”

Court records indicate that in December 2005, Kantarevic, then a personal trainer, was convicted of possession of anabolic steroids and sentenced to one year of probation. He was charged in connection with a federal investigation into the illegal importation of steroids for bodybuilders.

As part of Kantarevic’s guilty plea, he acknowledged that it was his understanding the drugs came from an internationally known bodybuilder and were intended for another bodybuilder who was a top competitor in the 2004 Mr. Universe contest.

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