Goading Churches into Defying Federal Tax Laws

The Religious Right has long made abuse of the priviledge of federal tax-exemption for churches and other non-profit organizations a political tool. While most of this goes on sub rosa, sometimes the movement organizes efforts to generate widespread civil disobedience, in hopes of making the law unenforceable.

This year is one of those times.

The Wall Street Journal reports that the Alliance Defense Fund, the premeir religious right legal network wants to goad churches into a high profile test. But there may be more going on here than meets the eye.

The Journal reports:

Alliance Defense Fund, a Scottsdale, Ariz., nonprofit, is hoping at least one sermon will prompt the Internal Revenue Service to investigate, sparking a court battle that could get the tax provision declared unconstitutional. Alliance lawyers represent churches in disputes with the IRS over alleged partisan activity.

The action marks the latest attempt by a conservative organization to help clergy harness their congregations to sway elections. The protest is scheduled for Sunday, Sept. 28, a little more than a month before the general election, in a year when religious concerns and preachers have been a regular part of the political debate.

It also comes as the IRS has increased its investigations of churches accused of engaging in politics....

Alliance fund staff hopes 40 or 50 houses of worship will take part in the action, including clerics from liberal-leaning congregations. About 80 ministers have expressed interest, including one Catholic priest, says Erik Stanley, the Alliance's senior legal counsel.

Even as such stunts serve to distort our national discourse in a theocratically framed argument, Americans United for Separation of Church and State noted in a press release that the chances of prevailing are slim:

In May of 2000, the Court of Appeals for the District of Columbia unanimously held that the IRS properly revoked the tax exemption of the Church at Pierce Creek, a congregation near Binghamton, N.Y., that bought newspaper ads in 1992 opposing presidential candidate Bill Clinton. (Americans United filed a complaint with the IRS about this clear violation of tax law.)

The court ruled in Branch Ministries v. Rossotti that "the revocation of the Church’s tax-exempt status neither violated the Constitution nor exceeded the IRS’s statutory authority." (The three judges were Reagan appointees)

The Interfaith Alliance added:

The Alliance Defense Fund’s call for pastors to break the law represents the height of irresponsibility.  They are putting churches across the country unnecessarily at risk to costly and time-consuming investigations that could result in harsh financial penalties.  Putting churches in legal and financial jeopardy seems a bizarre way of defending religious freedom, which the ADF claims to defend.

But there is an even greater issue at stake in this campaign than violating the law.  When religious leaders endorse candidates from the pulpit, they weaken both the sanctity of religion and the integrity of democracy.  The IRS allows – and the Interfaith Alliance encourages – religious leaders to speak out on the important political issues of the day, but when clergy endorse specific candidates or parties in their official capacity, they abuse their pastoral authority."

The IRS rules, while detailed and understandably unable to cover every cicumstance, are clear in principle:

"...all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office."

Any questions?

Nevertheless, the IRS has historically been reluctant to punish churches for straying over the line. However, over the past few years, the agency has been ramping-up both education and enforcement actions as churches, goaded by the religious right, have bent and broken the clear proscriptions against electioneering.

This could be a showdown year.

"I think very few clergy will yield to the Alliance Defense Fund’s worldly temptation," Barry Lynn of Americans United said. "And those who do will find their churches’ tax exemptions in jeopardy. I assume the ADF will provide a list of congregations unwise enough to join this move, and we’ll be ready to report those churches to the IRS."

It will be tempting to some to view this as a tempest in a tea pot; another example of far out, but not terribly consequential religious right antics. But I think this is a politization effort whose ripple effects will extend far beyond the participating churches, and a constitutional lawsuit that will certainly take years to resolve.
This is certainly an effort to keep the political juices flowing in politically conscious churches of the religious right in an election year in which their fortunes look dim, at least at the national level.

But there is more.

This is an effort that is seeks to frame the ongoing debate over the role of religion in public life over the next few years. We can say this in part because the Alliance Defense Fund is a central strategy organization of the Religious Right, whose board includes top officers of Focus on the Family and Campus Crusade for Christ. Their main initiatives are bellwether activities and merit our attention.

[Crossposted from Talk to Action]  

•  I know this is not about super delegates

  but it will have a lot to do with how mainstream discourse on religion and politics gets shaped over the next few years.

  So those with a head to do so, should make a point of getting conversant with this stuff. Progressives and Democrats have not been nearly as knowledgeable and effective as they could and should have been in response to the issue of abuse of tax exemption by the religious right, over time.

  And no, churches in general will continue to be eligible for tax-exemptions in principle. Whining about whether they should be eligible is a political non-starter. (Boring too.)

  by Frederick Clarkson on Fri May 09, 2008 at 11:01:02 AM PDT

  •  They want to force this into the courts

    to test the law, yet decry "activist judges."

    by MooseHB on Fri May 09, 2008 at 11:06:38 AM PDT

    •  Of course.

      When they lose in court it will be because of activist judges.

      More to the point, if the tax code provision is ever declared invalid, the rational response would be to simply eliminate the tax exemption for churches altogether.  

      by Endangered Alaskan Dem on Fri May 09, 2008 at 11:29:04 AM PDT

      •  the rational response

        is to stop whining about church tax exemptions. Their elimination ain't gonna happen.

        Therefore, what would rational people do to ensure that the religious right does not get away with abuse of the tax code for political purposes?

        by Frederick Clarkson on Fri May 09, 2008 at 11:31:57 AM PDT

        •  Who is talking about the religious right?

          I'm also talking about Jeremiah Wright and left-leaning clergy who have been diaried from the point of view, "Here's my pastor and isn't he great when he gives our point of view from the pulpit?"

          by Endangered Alaskan Dem on Fri May 09, 2008 at 12:18:13 PM PDT

          •  this diary is about the religios right

            in case you hadn't read it. And you made no mention of Rev.Wright, so not being blogo-mind readers -- who knew?

            I have been writing about, and actually have personally investigated issues of tax abuse by churches and other non-profits for many years. It is a problem located overwhelmingly to the point of being almost exclusively on the religious right. Don't let the odd exceptions to confuse the issue.

            by Frederick Clarkson on Fri May 09, 2008 at 12:32:56 PM PDT

  •  They want to lose

    It will prove how persecuted they are.  

    by MadRuth on Fri May 09, 2008 at 11:27:45 AM PDT

•  The Mind Boggles

  Thanks for bringing this to our intention.  With the current Supreme Court composition, the violators might well get away with this.

  No matter who's elected president, we're going to get many more years of jeopardy to the Constitution.

  by willb48 on Fri May 09, 2008 at 11:16:41 AM PDT

  •  yes

    and so when we hear gauzy rhetoric emanating from Inside the Beltway that the religious right is dead, in deline or irrelevant; that the culture wars are over; and that we must be about finding common ground for the common good -- let's keep stuff like this in mind.

    by Frederick Clarkson on Fri May 09, 2008 at 11:21:56 AM PDT

•  Their moment of glory is here

  They were arming for this for decades. It's wartime.

  They don't need to do this, to break the law explicitly. Especially in this election, the code words will be clear enough. I heard preacher after preacher do it very nicely... for 20 years. ;) 'LIBERAL' is all one needs to say, but the indirect possibilities are endless. No, they want to bring about moral civil war.

  This election has brought out hidden cancers already-- racism, electoral process, and it's the Evangelicals' turn. Let them come out into the sunlight. The Right will combust like vampires. I love it.

  by Junah on Fri May 09, 2008 at 11:22:13 AM PDT

•  Favorable tax treatment should be exclusively

  based on the church's actual charitable works, as per existing IRS rules for charitable organizations. "Prosperity Christian" mega churches need not apply.

  I've been on a rant for years about parishoners receiving tangible benefits from the church (subsidized or free child care, athletic facilities, subsidized or free education, etc.) while fully deducting their tithes. This is just a more egregious example of the same.

  by dallasdave on Fri May 09, 2008 at 11:26:15 AM PDT

•  Churches should take that day to preach

  on the necessity of separating church and state.

  by Bob Love on Fri May 09, 2008 at 12:45:00 PM PDT

  •  excellent idea! n/t

    by Frederick Clarkson on Fri May 09, 2008 at 01:18:52 PM PDT

•  Another idea: Close the form 990 loophole.

  One of the reasons the IRS has been in past loathe to investigate churches for 501(c)3 violations is that it can be difficult in practice to determine where the church's funds are.

  Churches--and, increasingly, some political dominionist groups like Wallbuilders--use a specific hole in the IRS's regs for 501(c)3 groups to hide their sources of funding and how much they are worth.

  Most 501(c)3 orgs (with the exception of groups that receive less than $25,000 yearly in donations including goods) are required to file a form 990 (in lieu of a form 1040).  This has, among other things, made it easy to trace funding sources and the average income of some of the political dominionist groups.

  Churches are the big exception.  In general, churches and ministries are not required to file anything with the IRS--no form 990, no nothing.  So long as they are registered as a church in some state, they are completely exempt.  (You can thank a court case where the Church of Scientology--who squirrels away its funds into literally hundreds of separate "ministry" groups--sued the IRS to force them to give a tax exemption to the CoS for this reg.)

  This is in part why Sen. Grassley has had to send Congressional subpoenas to certain televangelists involved in the ORU embezzlement scandal--literally there is no way, otherwise, to prove how much Creflo Dollar (for instance) is funneling to himself from the church and how much is being used for potentially illegal activity, because churches are not legally required to file any tax documentation with the IRS (and frequently not with states, either--all they have to do is send in a statement to their state's tax assessor that they are exempt due to being a church (if that much), and the IRS takes them at their word).

  One good way to solve the problem of church tax exemptions would be not to remove the 501(c)3 exemption wholescale, but to hold churches to the same regulations as all other nonprofit groups--required to file a form 990 if pulling in more than $25,000 in donations, required to itemize all income including expenditures for other groups, etc.

  Of course, churches--especially dominionist churches--will fight that tooth and nail.  For one, the form 990 requires groups to list associated groups--and practically all frontgroups (like the hundreds of frontgroups the Assemblies operates on a national or regional basis) would have to be listed.  (Yes, this means both Teen Challenge and the Seven Project would have to be listed--and, frequently, so would Focus on the Family and American Family Association state affiliates.)  

  Secondly, it may become distressingly clear just how much some denominations are contributing illegally to specific candidates--such as the Assemblies of God being one of the top political donators to Ashcroft's 2000 Senate campaign (to the tune of href="9,850, including a known $1000 donation from the denomination's leader).

  Needless to say, requiring churches to file form 990s would make it much, much easier to catch this sort of sillybuggers--which is precisely why it will be fought tooth and nail.

  by dogemperor on Fri May 09, 2008 at 03:18:52 PM PDT