Wednesday, May 5, 2010

Churches, Tax Exemption, and the Constitution.

In a story about a guy claiming to be part of a church property because he owns a defunct church and put his house in the church's name and refuses to pay even basic assessments we are lead back to the basic problem of tax exemption with regard to constitutional law.

A commenter noted:
"I'm sure some will call it unconstitutional, but I believe it's high time for the IRS to explicitly define what a "church" really is."

Yes. That's unconstitutional. The last thing the government should ever do is decide who is or is not a church or what is a religious organization and what is not. Scientology gets tax exempt status whereas various Humanist organizations get told they aren't a religion and many small religions are outright denied. It's absolutely unconstitutional to have the federal government deciding what is or is not an establishment of religion.

So you ask, how do we prevent asshats like Mr. Shields here from saying they are churches if there's no governmental overlord? We don't. The government should tax everybody equally regardless if they are religious or not. If you tax everybody equally then there's no point to claiming that you're a church when you're not because there's no benefit to it.

Everybody pays taxes.
--(Except Churches)

That "except churches" line is a law respecting an establishment of religion. It's that silly unconstitutional addendum that forces the IRS to make even more unconstitutional judgment calls as to who is and is not a religion. It shouldn't matter at all. Taxes pay for public services and everybody uses them. Some people here advocated that we should deny this guy public services because he doesn't pay for them. But, what about all the legit churches that similarly use public services and are tax exempt? Shouldn't we likewise tear up their roads? The only proper non-convoluted solution to the problem is to simply everything and tax everybody equally regardless.


Sparrowhawk said...

The actual tax code itself doesn't define a church at all. This is because doing so in the actual tax code (federal law) would be unconstitutional. To me that says "then forget the whole thing."

If it's unconstitutional to legally define a church, then how do we know what qualifies as a church for tax exemption status? Somehow the IRS knows how to make the call as to what a church is. I keep finding this 14-point list of "criteria" the IRS uses for a church, but I never seem to find a good source for it. It just appears on sites like this.

The weird thing is, there are a lot of organizations that qualify as tax-exempt non-profits in section 501 of the tax code.

I've never really understood the need to make the distinction for churches. I mean, I work for a social work non-profit that is 501(c)3 exempt, and we're not religious.

I think it might make more sense to get rid of the "church" stuff in the actual code, then churches could just qualify themselves as 501(c) exempt in other ways, as social service organizations/community centers, etc.

Sparrowhawk said...

Okay, scratch that, I found it on the IRS Website.

Tatarize said...

Well it's not proper to say what is and isn't a church but they need to do so. The US law code is often very crystalline in that the line is pretty solid and there's very little room for gray. To get 501 status you have a lot of hoops to jump through, you need to have your activities kept out in the open and above board.

Religious just say "we's worship gud" and they get status and everything they do is seen to be tax exempt. The Mormon church often buys up a lot of land in places that are due to develop and sits on it because they don't need to pay property taxes. There's also fun things like needing very little oversight for religious daycare or being completely exempt from many laws.

There was a case a few years back about a church falling down because they hadn't followed basic building procedures or filed any paper work because they just figured they were exempt.

Many churches are not non-profit, they would not qualify for 501(c)3. Being a religious charity is much easier than being a religious one, you don't really even need to be at all charitable, you can pretty much just keep the money and nobody would be the wiser.

Sparrowhawk said...

Well then, I suppose that influences my opinion a bit. If you're for-profit, no exemption for you...period. That's part of the reason I get so pissed when I think about Scientology being tax exempt. I know they went through a lengthy legal battle but...yeah it sounds like if you just say "we iz church can haz xempt k thxbye!" you get it, which is silly. You should have to prove you're worthy of tax exemption based on what you do, not just saying you're a church. But hell, I know I'm preaching to the choir here.

Tatarize said...

Scientology didn't go through a lengthy legal battle. Well they did, but that's not what got them tax-exempt status. They got status because they blackmaled a lot of members of the IRS and harassed them endlessly. Several Scientology people went to jail over Operation Snow White.

But they got their status.

You should need to jump through the same hoops that everybody else jumps through. If your church gives enough of the money to charity then they won't have much of a tax liability anyhow. But, even if you don't pay taxes you still need to file and be open to review to keep you honest.

Sparrowhawk said...


Nina Athena said...
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