Tax Exempt Status of Churches Revisited
I previously examined this issue on March 7 of this year. In brief, I touched on the relationship between church tax exempt status and the First Amendment (in my view, none; in Austin Cline's view, tax exempt status may indirectly violate the First Amendment); the idea that tax exemption prevents church and state from interfering in each other's affairs; the question of "what is a church" (Unitarians were challenged for not having "one system of belief"; the whole Church of Scientology issue); churches that DON'T apply for tax exempt status; and laws in Canada.
Speaking of Canada, genetic mishap raised the issue about political endorsements:
...To add another angle to this issue, you must have also heard of all the churches that indirectly or directly endorsed a candidate in this last election, defying the laws regarding this issue. As far as I have heard, none of these churches have faced any penalty for doing this....
Well, that leads directly into this story:
The Internal Revenue Service has warned one of Southern California's largest and most liberal churches that it is at risk of losing its tax-exempt status because of an antiwar sermon two days before the 2004 presidential election....
In his sermon, [the Reverend George F.] Regas, who from the pulpit opposed both the Vietnam War and 1991's Gulf War, imagined Jesus participating in a political debate with then-candidates George W. Bush and John Kerry. Regas said that "good people of profound faith" could vote for either man, and did not tell parishioners whom to support.
But he criticized the war in Iraq, saying that Jesus would have told Bush, "Mr. President, your doctrine of preemptive war is a failed doctrine. Forcibly changing the regime of an enemy that posed no imminent threat has led to disaster."
On June 9, the church received a letter from the IRS stating that "a reasonable belief exists that you may not be tax-exempt as a church...."
On a day when churches throughout California took stands on both sides of Proposition 73, which would bar abortions for minors unless parents are notified, some at All Saints feared the politically active church had been singled out....
In an October letter to the IRS, Marcus Owens, the church's tax attorney and a former head of the IRS tax-exempt section, said, "It seems ludicrous to suggest that a pastor cannot preach about the value of promoting peace simply because the nation happens to be at war during an election season."
Owens said that an IRS audit team had recently offered the church a settlement during a face-to-face meeting.
"They said if there was a confession of wrongdoing, they would not proceed to the exam stage. They would be willing not to revoke tax-exempt status if the church admitted intervening in an election."
The church declined the offer....
Owens, the tax attorney, said he was surprised that the IRS is pursuing the case despite explicit statements by Regas that he was not trying to influence the congregation's vote....
According to Owens, six years ago the IRS used to send about 20 such letters to churches a year. That number has increased sharply because of the agency's recent delegation of audit authority to agents on the front lines, he said.
He knew of two other churches, both critical of government policies, that had received similar letters, Owens said.
It's unclear how often the IRS raises questions about the tax-exempt status of churches.
While such action is rare, the IRS has at least once revoked the charitable designation of a church.
Shortly before the 1992 presidential election, a church in Binghamton, N.Y., ran advertisements against Bill Clinton's candidacy, and the tax agency ruled that the congregation could not retain its tax-exempt status because it had intervened in an election.
Dirty Greek (who linked to the article above) had his own take on the matter:
[T]his church is being threatened for being anti-war. I don't really think of war as politics, but in America today, apparently, being anti-war is considered "intervening in political campaigns and elections." Well, if that's how they want to play it, fine. I assume they'll next be going after the catholic church for recommending that politicians not be given communion if they are pro-choice and other fundamentalist christian churches who support or discourage voting for certain candidates.
I mean, they'll be fair, won't they?
Dirty Greek then links to AmericaBlog:
Assuming the IRS isn't violating US law, and the US Constitution, by launching a partisan witch hunt against a liberal church, we assume that the IRS will soon be threatening the tax status of the entire Catholic Church in America since Pope Ratzinger himself overtly tried to throw the US presidential election in favor of George Bush.
Specifically:
American Catholic bishops are trying to defy secret advice from Rome that Communion should not be given to John Kerry, the Democratic presidential candidate.
The advice is contained in an explosive memo - clearly directed at Sen Kerry - by Cardinal Ratzinger, the Pope's doctrinal advisor....
The memo was sent to the US Catholic Bishops' conference last month. With formidable clarity and force, it states that pro-abortion Catholic politicians should be warned by priests that they are not eligible for Communion. If the politician then "shows an obstinate persistence in grave sin", writes Cardinal Ratzinger, he or she should be turned away at the altar rail....
Some passages appear to have been drafted specifically with Sen Kerry in mind.
"Regarding the grave sin of abortion or euthanasia," writes the Cardinal, "when a person's formal co-operation becomes manifest (understood, in the case of a Catholic politician, as his consistently campaigning and voting for permissive abortion and euthanasia laws), his pastor should meet with him, informing him that he is not to present himself for Holy Communion until he brings to an end the objective situation of sin, and warning him that he will otherwise be denied the Eucharist."...
"I have been in Rome with the Pope and the president," said Deal Hudson, one of the most prominent Catholic laymen in the US and the editor of the religious Crisis magazine. "I also represented the president in the 25th anniversary celebrations of John-Paul's papacy. The Pope and his inner circle prefer pro-life Bush to pro-choice Kerry."...
Well, I ended up posting a response on Dirty Greek's site. Regular readers of this blog will note that I toned down my language - I only used the term "baby seal clubbers" once, and I didn't use the term "Communists" at all. I must be mellowing in my old age.
As a professing Christian who tends to lean toward the right end of the political spectrum, I also wish that the tax exempt status of churches would go away.
You've highlighted one of the reasons - in essence, the tax exempt status of churches is a wonderful device to get them to shut their mouths. Let the churches talk about safe things, like speaking nicely to children, but don't let them talk about anything important, like war and peace, life and death.
Second, you have examples of (from my perspective) organizations that call themselves "churches" just to get the tax exempt status.
Personally, I believe that the Catholic Church transcends secular political labels. I had a friend, a devout Catholic, who might spend one day helping pregnant teens avoid abortions, and then might spend the next day protesting nuclear weapons. If you really want to go after us baby seal clubbers, forget the Catholics - instead, question the tax exempt status of a Protestant church that states from the pulpit that "anti-life" candidates are not qualified to hold public office.
Let's close with one other view:
The IRS threat to revoke the tax-exempt status of All Saints Episcopal Church in Pasadena because of an antiwar sermon there during the 2004 presidential election is part of a larger, controversial federal investigation of political activity at churches and nonprofit groups.
Over the last year, the Internal Revenue Service has looked at more than 100 tax-exempt organizations across the country for allegations of promoting — either explicitly or implicitly — candidates on both ends of the political spectrum, according to the IRS. None have lost their nonprofit status, though investigations continue into about 60 of those....
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