WASHINGTON — If there is a wall separating church and state in America, it’s hard to imagine the Rev. Barry Lynn and Mathew Staver ever living on the same side.

However, their latest feud has them agreeing on one activity: reporting each other to the Internal Revenue Service.

Both the church-state watchdog Americans United (AU) and the Christian conservative Liberty Counsel are pointing fingers at each other, calling on the IRS to investigate the other’s violations of tax laws.

Filing IRS complaints has been a common tactic for Americans United (AU), which regularly reports churches that jeopardize their tax-exempt status by preaching politics from the pulpit.

Liberty Counsel routinely condemns such allegations, denouncing attempts atseparating church and state, and wanting to see the 1954 restrictions on tax-exempt institutions repealed altogether.

But after AU submitted an IRS complaint that the Jerry Falwell-founded Liberty University was violating its tax-exempt status by “essentially making an in-kind contribution to the Republican Party” when it banned a student Democrats club, the school’s legal arm, Liberty Counsel, decided to fight fire with fire.

“At that point, we had just had enough with this organization,” saidStaver, founder of Liberty Counsel and dean of Liberty University Law School. “We decided to give AU a dose of its own medicine.”

Liberty Counsel declared that AU, which is based here in the nation’s capital, is guilty of the same partisanship it routinely criticizes –turning a blind eye to left-leaning churches that endorse Democrats, but watching conservative churches like a hawk.

Both entities are 501(c)(3) non-profits and as such, cannot favor or endorse political candidates or parties.

AU denied Liberty Counsel’s claims, calling their complaint a “publicity stunt” done only in retaliation.

Lynn, executive director of AU and a minister in the United Church of Christ, said his organization has a “scrupulously neutral nonpartisan approach to our work.”

Americans United does have a record of reporting pastors and nonprofits who endorse Democrats. Only a week after Liberty Counsel’s partisan plea to the IRS, AU issued a statement questioning the appearance of Democratic gubernatorial candidate Brian Moran at a Baptist church in Virginia.

Staver of Liberty Counsel said the allegation was only to distract from AU’s previously biased behavior.

“I think their organization is based on smoke and mirrors,” said Staver. “It’s like the Wizard of Oz bellowing intimidating sound and fury that signifies nothing.”

Liberty University eventually lifted their campus Democrats ban by allowing both the Republican and Democratic clubs to meet on campus, but with unofficial student group status. The Lynchburg, Va., school denies pressure from AU had anything to do with it.

At the heart of this spat is the financial windfall tax-exempt organizations receive from tax-deductible donations.

“If you get the benefit of a tax exemption, you are not able to participate in partisan politics,” said Lynn. “That’s a very small price to pay for the incredible financial benefit of having a non-profit status.”

Unlike the dollar for dollar spending for campaign contributions, a dollar donation to the collection plate or charity fund drive costs 65 cents, said Douglas Laycock, a professor of constitutional law at the University of Michigan.

The tax laws serve to ensure donations to non-profits do not “turn into a tax deductible, tax-exempt conduit for campaign contributions,” according to Frances Hill, a law professor at the University of Miami who directs the graduate program in taxation.

The rules have only become more important in recent years with tighter campaign finance regulations. Repealing such tax laws would create a “huge loophole in campaign finance,” said Laycock.

The IRS has a special office which deals with tax-exempt complaints. Typically, once a case is reported, the IRS seeks to put the organization back into compliance first.

Of 110 nonprofits reported to the IRS after the 2008 election cycle, Hill estimated that 70 were found to have participated in impermissible political activities. Of those, she said only six or seven had their tax-exempt status revoked.

Both AU and Liberty Counsel will have to wait months to see if any investigation comes from their filed complaints.