Time to tax some churches?

[Pottapaug1938]

http://religion.blogs.cnn.com/2012/10/0 ... ?hpt=hp_t2

[David Merrill]

That is a lot of fun! You want to tax churches, jail pastors and otherwise ruin Christianity in America?

[Unidyne]

"Tax the churches." - Frank Zappa

[Kestrel]

Won't happen. Sorry.

Predominantly black churches have been politicizing the pulpit for decades. Case in point: Look up a certain pastor named Jeremiah Wright. I think you've heard of him. "Fairness" in enforcing such a measure across the board would require hitting a large portion of the black churches pretty hard.

Next up: Discrimination complaints because of a perception that a higher percentage of black churches get hit by the IRS than white churches.

[Pottapaug1938]

That is a lot of fun! You want to tax churches, jail pastors and otherwise ruin Christianity in America?

I'm not commenting on this issue, just putting it out for discussion as to what degree religious institutions which use their pulpits for overtly political purposes should lose their tax exemption or have it reduced, if at all.

And now, I've got to get ready for ...

www.SOAR2012.org

[Number Six]

The laws should be enforced. I have seen and heard how concerned the Roman Catholic Church is about Obama's health care plan. So while the Roman Catholic Church has been adamant over the years about obedience to moral as well as civil laws, they are particularly affected by changing laws that go against Papal pronouncements on pro-life issues because the Church has many hospitals and clinics that are partly under their control and partly under state financing with all the complexities that involves.

The Fundamentalists are more overt in their opposition to the Obama administration. It is against the law to preach politics as cited from the pulpit. I did hear a major US preacher say from the pulpit "...just don't vote for those baby killers!" That was coded language and obviously so. When I called him on it I was asked to provide the transcript of when he said it, not an easy thing to do with a church that had preachers 4X a week!

The laws are being violated on a lot of levels when ministers were falling over one another in endorsement of a candidate who was "pro-life" because "Jesus changed his heart", but are uniformly lukewarm when it comes to fulfilling Biblical mandates on support of civil leaders because they have some unsavory policies that run counter to their political stances.

[Famspear]

Here's the statute, Internal Revenue Code section 501 (excerpt):

§ 501 - Exemption from tax on corporations, certain trusts, etc.

(a) Exemption from taxation

An organization described in subsection (c) [ . . . ] shall be exempt from taxation under this subtitle [relating to federal income tax] unless such exemption is denied under section 502 or 503.

[ . . . ]

(c) List of exempt organizations

The following organizations are referred to in subsection (a):

[ . . . ]

Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office......

[Famspear]

Clearly, I do not have a constitutional right "not to have a federal income tax imposed on me."

One question is: Does a religious organization have a constitutional right "not to have a federal income tax imposed on it"?

[webhick]

I see that churches will once again get an exception to the rules that bind all other non-profits. Not that this is a kind of speech my food pantry would desire to exercise, but it's like if you're not part of a religious organization, then you're a second-class non-profit in the eyes of the government.

[Famspear]

I see that churches will once again get an exception to the rules that bind all other non-profits. Not that this is a kind of speech my food pantry would desire to exercise, but it's like if you're not part of a religious organization, then you're a second-class non-profit in the eyes of the government.

Well, some churches are trying to obtain an exception. Whether they will get it or not remains to be seen.

What these churches want is to maintain the current exception they have -- which is, that they don't have to pay federal income tax -- but at the same time not have a particular string attached to that exception -- the "string" being the prohibitions in section 501(c)(3). It's going to be tough for the churches to win that in court.

I haven't read any of their briefs, but it should be interesting to see how they frame their arguments, and how this plays out in the courts.

[Famspear]

I notice that in some of the stories in the media, the representatives for churches' position often don't mention what they're really after. Instead, they try to frame the debate in terms of the mean ol', bad ol' IRS trying to stifle their freedom of religion or freedom of speech when, in reality, they just want to keep their special exemption from federal income tax without having to be subject to the "string" that the Congress has attached to that special benefit.

EDIT: Example, from the story linked above:

“The IRS has the ability and the authority to regulate their sermons. We are giving them the opportunity to do that and if they challenge that, we will challenge that in court,” said Eric Stanley, Alliance Defending Freedom's senior legal counsel. “It is all about creating a test case to find the Johnson amendment as unconstitutional.”

Maybe Stanley mentions the real issue, which is the federal income tax exemption, somewhere else.

[Famspear]

One way for the churches to view the debate would be along these lines:

Look, we the churches realize that we don't have a constitutional right not to be taxed. But our First Amendment protected freedom of speech and freedom of religion is too important to be subject to the whim of Congress. If you, the Congress, want to grant us an exemption from federal income tax, fine, we appreciate that very much. But listen Congress, you cannot grant that exemption with the "string" in the form of a prohibition regarding the endorsement of political candidates. If you want to, you can simply repeal the income tax exemption for religious organizations, and we can live with that. But we, the churches, don't think Congress has the political will to do that.

[jg]

For the document outlining legal arguments to allow supporting or opposing a candidate see
http://www.alliancedefendingfreedom.org ... uments.pdf

Alliance Defending Freedom believes that the IRS restriction on religious expression from the pulpit is unconstitutional. After 50-plus years of threats and intimidation, churches should confront the IRS directly and reclaim the expressive rights guaranteed to them in the United States Constitution.

Of course, the provision does not just apply to church organizations, but to any and all entities that are tax exempt under 26 U.S.C. § 501(c)(3).Section 501(c)(3) provides that any organization “operated exclusively for religious, charitable, [or other specified] purposes, . . . and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office” shall be exempt from taxation. 26 U.S.C. § 501(c)(3).

A history of the amendment asserting this was primarily directed at anticommunist groups is found at
http://www.alliancedefendingfreedom.org ... istory.pdf

This provision does not prohibit general declarations such as "Do not vote for those that support abortion" but only bars participation or intervention in a campaign for or against any candidate for public office by the organization. General proclamations are not prohibited.

Enforcement has always been slack; both to religious and to secular organizations.

[jg]

Clearly, I do not have a constitutional right "not to have a federal income tax imposed on me."

One question is: Does a religious organization have a constitutional right "not to have a federal income tax imposed on it"?

No, there is no such limitation on the Congressional power to tax.

The decision in Branch Ministries v. Rossotti presents the case for enforcement.
See http://www.irs.gov/pub/irs-utl/branch_ministries.pdf

In fact, the only way in which the revocation of Section 501(c)(3) status has had
any effect on plaintiffs’ exercise of religion is that the Church may now have less operating money to spend on religious activities because it is a taxable entity. The fact that plaintiffs may now have less money to spend on their religious activities as a result of their participation in partisan political activity, however, is insufficient to establish a substantial burden on their free exercise of religion. See Jimmy Swaggert Ministries v. Board of Equalization of California, 493 U.S. 378,391 (1990) (“to the extent that imposition of a generally applicable tax merely decreases the amount of money appellant has to spend on its religious activities, any such burden is not constitutionally significant”). Cf. Bob Jones Univ. v. United States, 461 U.S. 574, 603-04 (1983) (“Denial of tax benefits will inevitably have a substantial impact on the operation of private religious schools, but will not prevent those schools from observing their religious tenets”).

Income taxation which is generally applicable is not a restriction on the constitutional protections for the exercise of religous freedom.

By participating in the campaign of any candidate the church can make the choice not be to subject to the limitation which is part of the exemption from tax for all organizations. There is no need to change the law as each organization already has the option to opt into taxation via political campaign participation.

[Famspear]

Here are some trick questions -- questions that the government attorneys might throw at the churches in litigation over section 501(c)(3):

1. Does a church that endorses a particular political candidate violate public policy, thereby failing to qualify as a common-law charity?

2. If a church fails to qualify as a common-law charity, is the church eligible for tax exemption under section 501(c)(3)?

EDIT:

3. Suppose the church argues that even if there is a public policy against charities endorsing a political candidate, that policy cannot constitutionally be applied to a church that endorses a political candidate on the basis of sincerely held religious beliefs. Is this a winning argument for the church?

4. Suppose that the church argues that such a construction would violate the church's free exercise rights under the Religion Clauses of the First Amendment. Is this a winning argument for the church?

[LaVidaRoja]

If, for example, a Baptist Church were to endorse Romney based on a sincere, religious belief, is that church now saying that they are converting to being a Mormon Church?

I ask because it appears to me that IF you have a sincere, religious belief in the positions of an individual, you are embracing the same faith as that individual.

[Number Six]

The defenses of ministers when called to be accountable to government for the benefits they receive as tax exempt entities are mostly laughable. If the investigation by the IRS of their cash flow becomes hot and heavy, they sent out desperate SOS's to their donors with urgent pleas for money crying out their "backs are against the wall", as with the quasi religious-psychological organization cult and blatantly political, FHU's Roy Masters. "Dr." Creflo Dollar was outraged that his pray TV network would be called to task by Senator Grassley's government oversight of various tax exempt "ministries" for an accounting on how the law stacked up with his activities. The proof is clear that the laws are being violated when specific candidates are being endorsed or black-listed as unsupportable in the voting booth if a church member wants to remain in good standing. Whoever wins next month will probably have a bearing whether action is taken against ministers who violated the law by preaching politics from the pulpit.

[Cpt Banjo]

1. Does a church that endorses a particular political candidate violate public policy, thereby failing to qualify as a common-law charity?

Probably not, at least if the endorsement is a one-time occurrence.

2. If a church fails to qualify as a common-law charity, is the church eligible for tax exemption under section 501(c)(3)?

No. This was how Bob Jones University's tax exemption was revoked. See Bob Jones Univ. v. United States, 461 U.S. 574 (1983):

Section 501(c)(3) therefore must be.analyzed and construed within the framework of the Internal Revenue Code and against the background of the congressional purposes. Such an examination reveals unmistakable evidence that, underlying all relevant parts of the Code, is the intent that entitlement to tax exemption depends on meeting certain common law standards of charity -- namely, that an institution seeking tax-exempt status must serve a public purpose and not be contrary to established public policy.

3. Suppose the church argues that even if there is a public policy against charities endorsing a political candidate, that policy cannot constitutionally be applied to a church that endorses a political candidate on the basis of sincerely held religious beliefs. Is this a winning argument for the church?

No.

4. Suppose that the church argues that such a construction would violate the church's free exercise rights under the Religion Clauses of the First Amendment. Is this a winning argument for the church?

No. The right to freely exercise one's religion does not include the right to be free from taxes. One might as well argue that a publisher's free press rights includes the right to tax exemption.

[Famspear]

Hey, no fair citing U.S. Supreme Court opinions!

Yes, Cpt Banjo rang all my bells: the Bob Jones University case.

EDIT: This case has a specific significance for me. When I took the first federal tax class in law school, the final exam (which was the only exam, and the only grade in the class, which is pretty typical in many law schools) had one question where, as it turned out, the Bob Jones University decision was relevant.

After all these years, I don't remember the specific test question, the fact pattern. What I remember is that my impression was that I had written a pretty good, detailed analysis on the exam. Within a few hours after the test was over, however, I was horrified when I realized that I had forgotten all about the Bob Jones University case when I was taking the exam -- I hadn't applied the decision at all, or even mentioned it in my answer on the test.

I still made an A on the test, so I concluded that my statutory construction sans the Bob Jones University decision didn't hurt me too much.