American Atheists is Suing the IRS, Claiming That It Gives Preferential Treatment to Religious Groups

The IRS loves churches.

How do I know this? On Pulpit Freedom Sunday back in October, more than 1,500 churches openly defied the law and endorsed a candidate for President. The IRS sat back and did nothing about it. Why? Bureaucracy. There was no one in the office who had the authority to initiate the audits, they said. It didn’t sound like they were in a rush to find someone to fill that position, either.

Last month, the Freedom From Religion Foundation sued the IRS over this. They said that Douglas Shulman, the IRS Commissioner, was violating the Establishment Clause of the Constitution by not doing his job and enforcing the “you can’t endorse a candidate from the pulpit” rule. (They also said Shulman violated their Equal Protection rights.)

The preferential tax-exemption that churches and other religious organizations obtain, despite noncompliance with electioneering restrictions, amounts to more than $100,000,000,000 annually in tax-free contributions made to churches and religious organizations in the United States.

In other words, if churches are taking in so much money, tax-free, they should not be allowed to break the law and endorse political candidates. It was the IRS’ job to make sure that happened, and even when the churches flaunted their violations of the law, the IRS pretended like nothing was happening.

We’re still waiting to see how that lawsuit plays out.

Tonight, American Atheists announced that they, too, are suing the IRS, but for a different reason: They say Shulman is giving preferential treatment to churches and religious organizations (PDF):

[American Atheists, Atheists of Northern Indiana, and Atheist Archives of Kentucky] seek an injunction and declaratory relief to stop Defendant in his capacity as Commissioner of the [IRS], and hence the IRS, from giving preferential treatment to religious organizations and churches under I.R.C. § 501(c)(3) in violation of Plaintiffs’ rights to the Equal Protection of the Laws required by the Due Process Clause of the Fifth Amendment, the First Amendment, and the Religious Test Clause of Article VI, § 3 of the Constitution to the United States of America.

Ok… let’s put this lawsuit in English (courtesy of a math teacher who has no legal training but claims to know how to read):

Religious groups (including churches) are tax-exempt, just like non-profit groups. Usually, groups that are tax-exempt have to submit an application to receive that benefit (Form 1023) or pay a large fee ($850). Religious groups don’t have to do that.

Furthermore, churches don’t have to tell the IRS what they do with the money they take in. So are they doing things that actually benefit the public and, thus, warrant a tax-exemption? Who knows. Other non-profit groups, on the other hand, have to file that paperwork meticulously.

Churches also get other special benefits the rest of us don’t: Pastors, for example, can deduct the cost of mortgage payments and homeowners insurance from their taxable income. Churches don’t have to withhold income tax from salaries paid to pastors. There’s no limit to the size of these deductions, either. Considering how many pastors there are who live in multi-million dollar mansions, it’s pretty obvious a lot of churches take advantage of this rule.

Those tax deductions we’re not getting from the religious world cost our country an estimated $71,000,000,000 a year.

American Atheists has urged the IRS to classify them as a religious group so they can get access to those same benefits, but the IRS has said no each time.

That, AA claims, is discrimination:

… American Atheists was forced to undergo expense to apply for 501(c)(3) tax exempt status that churches and most religious organizations are not forced to undergo.

… American Atheists is forced to expend time and money making accurate annual filings with the IRS each year or risk losing tax-exempt status or being subject to other sanctions for non-compliance. Most religious organizations and churches are not.

It would violate the sincerely held belief system of American Atheists to seek classification as a “religious organization or church” from the IRS. It, therefore, files its informational return each year while enduring discriminatory treatment.

Thus, American Atheists is forced each year to disclose information about its employees, volunteers, and donors — members of the most hated minority in America today that is subjected to great prejudice and discrimination — whereas churches and many religious organizations need not make such disclosures.

Overall, AA argues, the IRS gives unfair preferential treatment to religious groups and discriminates against atheists.

It prevents AA from getting donations larger than $5,000 because they would then have to disclose the donors’ names, something churches don’t have to do. This gives churches a “fundraising advantage.”

The filing fees to retain 501(c)(3) status are expensive — something churches don’t have to pay but atheist groups must.

Atheist groups have to pay their staff more money since they can’t deduct anything for housing expenses like churches can.

AA is asking the Court to rule that all tax codes treating churches differently from other non-profit groups are unconstitutional.

Do they have any chance of winning? Dave Silverman and AA’s Legal Director Edwin Kagin are betting on it:

“American Atheists receives tax-exempt status under Internal Revenue Code 501(c)(3),” said American Atheists President David Silverman, “but because the organization is not classified as religious it costs American Atheists, along with all other secular non-profits, significantly more money each year to keep that status. In this lawsuit, American Atheists and the other plaintiffs are demanding that all tax-exempt organizations, including those characterized as religious by the IRS, have the same requirements to achieve tax-exempt status.

“Religious organizations and churches are treated differently from secular organizations,” explained American Atheists National Legal Director Edwin Kagin. “The exemptions are applied in a way that discriminates solely on the basis of whether an entity’s members express beliefs and practices accepted as religious. The IRS treats your organization better if you profess belief in a supernatural deity.”

For what it’s worth, these kinds of lawsuits don’t always go very far, but the argument makes sense. It’s a lot easier for religious groups to operate, under our current laws, than atheist ones. If the government is giving preference to religious groups over non-religious groups, for any reason, there’s a problem.

About Hemant Mehta

Hemant Mehta is the chair of Foundation Beyond Belief and a high school math teacher in the suburbs of Chicago. He began writing the Friendly Atheist blog in 2006. His latest book is called The Young Atheist's Survival Guide.

  • http://www.facebook.com/profile.php?id=750428174 Paddy Reddin

    About bloody time.

  • primenumbers

    The argument is sound and the fight is a good one. Perhaps a billboard campaign showing pictures of pastors’ houses (start with Benny Hinn’s) would help make the point!

  • JWade

    How about this for a parallel-
    Conservatives/religious people will often post things in disgust about those living on government aid (food stamps, welfare, etc.) driving expensive cars, wearing nice clothes…basically living a higher standard while accepting government aid. And then on Sundays they go to their church….which is doing the same thing. Easy to afford golden dinner plates and wine cups when you don’t have to pay taxes.

  • http://itsmyworldcanthasnotyours.blogspot.com/ wmdkitty

    Good!

  • L.Long

    Hay! all those religious idiot say that atheism IS A RELIGION!! So lets admit it and get the tax exemption!!

    • http://www.youtube.com/user/GodVlogger?feature=mhee GodVlogger (on YouTube)

      Yes, but it goes much farther than that.

      Nonprofit groups that have nothing to do with religion and are not atheist in nature should be treated the same way as churches/religious organizations.

      • Rwlawoffice

        They are. They are all tax exempt.

        • http://www.youtube.com/user/GodVlogger?feature=mhee GodVlogger (on YouTube)

          Did you read the article up about that all?

          They absolutely are not all treated the same.

          All of them may be tax-exempt, but there are very substantial differences in the paperwork requirements, disclosure, etc. for a church versus other non-prophet organization.

        • amycas

          No, they are not treated the same. Nonreligious tax exempt organizations have to have open books for the IRS. Nonreligious organizations have to file paperwork every year showing what good they are doing for the public in order to stay tax exempt. Religious organizations don’t get to do any of that–they don’t have to prove their beneficial and they don’t have to give their books to anyone in the IRS.

          • Hypatia’s Daughter

            And nonreligious tax exempt organizations have restrictions on where the money comes from (i.e.dues, donations, interest, rents or sale of goods) and where it goes. They may not lose their nonprofit status but they may have to pay taxes on it.
            Nobody, outside of the church, knows where church money comes from or goes to.

            • http://squeakysoapbox.com/ Rich Wilson

              And churches get other special privileges like being able to circumvent local environmental regulations prohibiting construction.

              • http://itsmyworldcanthasnotyours.blogspot.com/ wmdkitty

                And the ADA.

    • http://absurdlypointless.blogspot.com/ Bubba Tarandfeathered

      In the beginning there was an absurd nothingness, and that absurd nothingness begot something, and something begot the big bang, which begot the known universe, which begot some really cool particles, which begot stars n shit, which exploded to make even cooler particles and elements, which made more stars and galaxies, which begot a really big star that exploded and made a lot of dust n shit, which made a solar system, which begot Man, and Man seeing that the world was greater than Himself was freaked and scared of this fact, so Man created the gods. And on the last day Man realized his fear and cast the gods from his curious mind.

  • DougI

    You see, these special exemptions are how churches and Christians are being persecuted in America. Money corrupts people so the godless, satanic government thought to make it easier for churches to get really, really wealthy so they’d forsake god for ‘mammon’.
    If you feel the churches pity then I’m sure they have plenty of bank accounts for you to donate pity money to.

  • Rwlawoffice

    Most likely your prediction that this lawsuit will not go far is correct. There is a problem with standing and lack of a legal harm.

    • http://squeakysoapbox.com/ Rich Wilson

      Can you expand on the standing part? There was a private school tax exemption one in (I believe TX) where since it wasn’t specifically a tax, the courts decided that nobody had standing, so I don’t doubt that it will happen again. I’m just curious if you can explain it a bit more to us lay folk. I would think any citizen would have standing in any case that involved someone else getting a tax break that they don’t. Might not be a case for other reasons, but I don’t get the lack of standing in federal tax cases.

      • http://twitter.com/Leebot Leebot

        In an ideal world, yes, any taxpayer would have standing to sue the government on any matter of an unconstitutional use of tax money. However, we don’t live in that world. We live in a world where judges often come to conclusions based on political loyalty or their own religious beliefs, and then they find a way to justify it within the law. In many of these cases, the legal decision should be clear, so the only way courts can avoid having to make it is to claim that the plaintiffs don’t have standing to sue (through whatever legal contortion is necessary).

        It’s basically a legal contortion designed to avoid making judgments they don’t want to make.

        • Guesty Guest

          Your ideal world clearly includes infinite and costless judicial resources. A pity the world we must live in doesn’t. The reason why there are additional barriers to standing in tax cases is that nobody likes paying taxes and everybody has some objection as to how taxes are spent. If the courts had to entertain every suit from disgruntled taxpayer it would do NOTHING ELSE, because there aren’t enough judges, lawyers, courtrooms, and time in the known universe to sort through them all.

      • Rwlawoffice

        To have standing, the person bringing the suit must show some personal harm from the act complained of. When it comes to tax laws the courts require that the tax law affect the person personally. For example, if AA was refused tax exempt status because they were not religious, they would be harmed if the tax exemption was based on beliefs. The fact that all non profits get the exemption is no direct harm to AA because religious organizations get it as well. The housing exemption might get closer but I would need to research that to see the justification for it before I knew for sure,

  • Ian Reide

    Great news. Best of luck.
    A few have suggested here that the case will not succeed or even go far, but, the first attempt is the first attempt. It will highlight the issue and lead to success in the future. So, again, best of luck.

  • Momma

    Ah, nothing like selling out your identity for a buck! “American Atheists has urged the IRS to classify them as a religious group so they can get access to those same benefits” Sell outs!

    • http://squeakysoapbox.com/ Rich Wilson

      There are times when semantics matter. This isn’t one of them. Being declared a ‘religion’ for tax purposes hardly means you’re a religion in the faith sense. Hell, Scientology is a ‘religion’ for tax purposes in the US, and we both know it’s a latter day con.

      • 7Footpiper

        On December 8th there was a video link posted of Amanda Knief talking about how Atheists can avoid employment discrimination, and one of the things I did take away is that when it comes to employment law, atheism is considered a religion and is subject to the same protections and constraints as any other religion. Now, I’m pretty sure this is something to do with the US Constitution and it’s interpretation and not a specific piece of legislation dealing with atheism.

        I’m also pretty sure that American Atheists would rather the religious institutions and mega churches lose their tax exempt status then to themselves be labeled a religion.

        • http://squeakysoapbox.com/ Rich Wilson

          Isn’t it ironic that AA is having to be classified as a ‘religion’ while Bill O’Reilly thinks Christianity is not a religion.

      • http://www.poetrypoem.com/musicman Chris Murray

        Yeah, that’s rather the point. It’s assinine to be classified as a religion when you AREN’T! Even more assinine to SUGGEST it!

        • http://squeakysoapbox.com/ Rich Wilson

          My reply to your last comment on WND 9/11 cross is in moderation. Assuming that on an article that old, it may never come out, I’m going to stick it here:

          “Christian faith that is targeted”

          I find it curious (puzzling, baffling, interesting) that I keep mentioning that 78% of this country is Christian, while 0.6% is Muslim, and people keep asking the question.

          AA and other organizations go about it different ways. There are other billboards out there. Even the “Good without God?” ones end up getting vandalized. Which should not be a condemnation of Christians in general of course, but does indicate that no matter how benign you try to make it, somebody is going to take it as an insult. There are Christians in America who are offended by the idea that atheists do anything but STFU. At some point you give up trying to not offend those who will be offended anyway.

          There are plenty of billboards which are insults to non-Christians. So to turn this around, how come we don’t hear more Christians calling out this Psalm 14 nonsense? “The difference is that ours is true”. See, we’re back where we started.

          I find the “know” a bit annoying because it’s factually wrong. It doesn’t matter whether I think it’s a myth or not, other people don’t ‘know’ that it’s a myth, since they’re true believers. It’s a bit like “In God We Trust”. Whether God exists or not, there are Americans who don’t trust, let alone believe in the existence of God. So the statement is factually incorrect. Which is more important to be factually correct, some billboard, or our national motto?

          The full context is here http://www.wnd.com/2012/08/why-american-atheists-hate-911-cross/#comment-751826284

          I’m really not trying to move this to ‘my’ venue, but I’ve been frustrated before by WND moderating things. Not sure if it’s because I got too many down votes, or ‘STFU’ or what, but I can’t be bothered to go back and make sure my reply got through.

          • http://www.poetrypoem.com/musicman Chris Murray

            Yeah,I agree some religious billboards are offensive and shouldn’t be up in the first place. It’s my opinion that there should be no religious billboards or atheist billboards. All it does is create strife. Show everyone the love of Jesus while admitting we are fallen and are far from perfect but I think it’s wrong to intentionally offend *anyone*. That being said I stand behind my comment that David Silverman saying his billboards are to bring atheists out of the closet is nonsense. I fail to see how a billboard could help someone in a struggle with their faith,which if you haven’t the faith In a spiritual sense this is all gibberish to you but those that do have the spiritual faith know that EVERYONE has struggles with their faith at times and its a very personal thing–one that a billboard could never be the deciding factor in saving or ruining that very faith so,yknow the whole idea that anyone would spend that kind of money to “potentially” garner new constituents is ludicrous!

    • Stev84

      It’s not unusual really. For legal purposes, atheism usually counts as a belief system. You can see that in free speech and freedom of religion cases sometimes.

    • Bad_homonym

      I guess you didn’t read the article above. AA says it would be a violation of sincerely held belief to apply as a religious organization. What they are asking for is to be treated as equals in terms of how they qualify! By that logic I suppose you think women were sellouts when they demanded equal rights of men?

  • amycas

    This is exactly what I’ve been saying. If churches or religious organizations want to be tax exempt, then fine, just fill out all the same paperwork and have the same restrictions as all other tax exempt organizations.

  • LIONESS

    NICE! hope it works out for the BEST…

  • peekaboo

    An interesting idea. I can understand being upset with the churches that do not comply. I can’t imagine my head pastor ever making a political endorsement from the pulpit, or even at a table in a coffee shop. Those churches that a thing should get punished.

    I can also see AA as a non-profit. The problem, and I think several have pointed this out is that all non-profits are not the same. I’m a bit confused by this lawsuit though. Is the goal to elevate AA to a church (makes me chuckle) or to take down other non-profits and churches down to the level of the AA.

    The latter could have a ill-desired effect. A lot of good non-profit organizations have their roots in religion. I don’t think I like the idea of killing them off. Let’s face it, your actually upset that a church (any church) can have a non-profit status and the benefits that go with it. THAT’S the bigger issue here. If we eliminate churches from non-profit status I can only think that most other non-profits will go away too.

    I don’t think now is the time to start eliminating food banks around the country, which I think could be a possible undesired consequence if you won this lawsuit.

    • Beth

      They’re not at all saying that churches shouldn’t have non-profit status. They’re saying the ones that make political endorsements (which is a legal violation of their non-profit status) should have their status taken away and that other churches or religious organizations should be treated the same as any other non-profit organization.

    • Stev84

      Way to miss the point and babble nonsense

      No, they aren’t all the same. Yet the IRS treats all churches uniformly, even though many of them are for-profit businesses. And if a religious charity is truly a non-profit, they will have no problem proving it and obtaining that status.

      • peekaboo

        Steve. I think I do get the point. But thanks.

        I think it would be extremely difficult to prove a church is anything but a non-profit though, especially if they are doing building upgrades and what not which take a significant amount of money on hand to get a loan for such things. I agree though, there are violators and some extremely wealthy pastors out there.

        But you have to remember something else, some of those pastors write books and do speaking engagements. Maybe THAT’S where their money is coming from. Just a though. My pastor are not wealthy according to US standards, but he lives more comfortably than I do. He also writes books too though and I’m sure gets some kickback from that endeavor, as he should.

    • Reddo

      I’m pretty sure they know the lawsuit WON’T give them the rights that are given to churches. I believe that’s not the point either, though.
      The intention seems to be “Why do you treat them like that? Treat us ALL like that!” to which, obviously, the only answer is “We cannot treat everyone like that or the system will break”, which will result in churches losing the special benefits they have. And those are the special benefits on top of the tax-exempt status. The tax-exempt will probably remain and that’s okay.
      You see, if churches are required to write up where they spend their monies and go through every step all the non-religious non-profits go, any churches that are for-profit will lose their tax-exempt status, as should any church with a political agenda and all that. And that’s how it should be.

    • John Riemer

      They aren’t saying that the church having a non profit status is wrong. They are saying that giving religious institutions a whole different non profit status, with special perks and less oversight, is wrong, and I agree. Everyone should have to play by the same rules, either by granting the same perks to the other non profits or taking them away from religious ones. I don’t really care which way they go with that, but I fail to see any legal justification why an athiest soup kitchen should be treated any differently by the IRS than a Catholic one.

  • http://www.facebook.com/matthew.pye Matthew Curry Pye

    this is awesome news.

  • notsosilentBob

    And when they win, can we send the Tax man round to the Popes house ? .. he is sitting on quite literally a GOLDMINE .. all the while telling the rest of the world to be thankful to God for their poverty

    it is the most arrogant and sickening act I can imagine. getting rich at the cost to the poorest of people.

    and it Gives the honest and the deeply spritual pastors / priests a really bad rep. which they do not all deserve !

    • Stev84

      Italy has actually started to tax the Vatican’s massive non-religious and for-profit real estate property recently.

  • http://www.facebook.com/people/Tyrone-Smith/100001236279309 Tyrone Smith

    Organized religions are businesses, and highly profitable ones. They should pay taxes. That won’t prevent anyone from believing in whatever they want.

  • http://twitter.com/douglas_boyle Douglas Boyle

    What are the tax benefits of being a Philosophical organization?

  • loljoe

    Two parts of the article are contradicting each other. Do they want to be a religious organization or not?

    1. American Atheists has urged the IRS to classify them as a religious group so they can get access to those same benefits, but the IRS has said no each time.

    2. …It would violate the sincerely held belief system of American Atheists to seek classification as a “religious organization or church” from the IRS. It, therefore, files its informational return each year while enduring discriminatory treatment.

    • Chasity Channell

      I do not think you understand what they are doing, refer to The Thinking Atheist podcast where Dave Silverman gives details. This article does not explain it well.

  • Don M

    Man, this is stupid.

    On the one hand, you want to be classified as a religion. On the other, you don’t want religious exemptions.

    Why can’t AA be a non-profit? The only reason I can think of is that it wants to talk about politics. And churches, and other non-profits shouldn’t be able to talk about politics, either. But we don’t live in that universe. Superpacs get billions, and don’t disclose donors, like Karl Rove’s group. If you can’t figure out that trick, you’re too stupid to run an organization. And it’s bone stupid to say you can’t get a donation over $5,000, when in fact you just can’t get an anonymous donation of more than $5,000. So, you guys are big Citizens United fans – you want to tap into the secret billionaire cash?

    Ok, I get that churches don’t have to pay the $850, and other nonprofits do. Fair enough, I suppose. But this isn’t what this is really about, is it?
    It’s AA’s version of pr. And they are too stupid to get that no one will have very much sympathy with them. They will hear they are trying to be a religion, and people will rightly roll their eyes. They will hear about the $850 fee, and people will not see it as a big deal. What they will get, instead of a court victory or a sympathtic story, is a series of stories that treat them as the butt of a joke. “Do you know the American Atheists lost a lawsuit where they tried to get themselves qualified as a religion?” And all the poor messageboard defenders of godlessness will be hard pressed to explain that atheism isn’t a religion.
    If atheists are such rationalists, why do they always act like morons?

    • Barael

      Yep, the rational thing to do would be to let churches keep playing politics from the pulpit while enjoying all the perks that no other non-profit gets. Unilateral disarmament, that’s the smart ticket!

  • http://justdfacsmaam.wordpress.com/ MarkNS

    A lot of people have said these cases don’t succeed. What possible argument is there against it?

    • Christoffer Viken

      Courts are biased.

  • http://socimages.blogsome.com/ Alessandra

    It certainly doesn’t bother these very same atheists that the government spends 700,000,000,000 dollars a year designing ways to kill people (the “defense” budget), but obviously they hate churches…

    • http://squeakysoapbox.com/ Rich Wilson

      You are certainly wrong about what this very same atheist thinks about the USA accounting for nearly HALF of the world’s military spending. Try speaking for yourself, and not making assumptions about what does or does not bother other people.

      • http://itsmyworldcanthasnotyours.blogspot.com/ wmdkitty

        Yeah, what he said. And this polytheist is disgusted by what our country has done with said military (and attendant spending).

      • http://socimages.blogsome.com/ Alessandra

        I don’t see anyone “suing” the military…

        • 3lemenope

          Because that wouldn’t make a lick of sense. What would the cause of action be?

          • http://socimages.blogsome.com/ Alessandra

            I suppose you’re too dense to understand I didn’t mean an actual lawsuit – you do nothing about military spending, but you hate the Churches – People like you, 3l, are nothing but full of it

            • 3lemenope

              I am chastened by you pointing out I don’t have long distance mind-reading powers and cannot but assume you mean what you write and not, you know, some other thing you didn’t write. My bad. I will endeavor to suss out your hidden meanings in the future.

  • rentgould

    The very clear separation and non support of religion needs to be defended.

  • Hanan

    What does endorsement mean? I can understand if institutions are using tax exempt contributions for candidates would be a problem, but what if it is just a sermon? Nothing more. Stating that in the pastor/rabbi’s opinion, Candidate X is the best for positions ABC. Is this sort of endorsement still a problem with people?

  • http://www.poetrypoem.com/musicman Chris Murray

    American atheists group is griping about the $850.00 yearly fee to retain 501c3 yet they will gladly drop $15,000-$20,000 for a month of billboard space!

    • http://squeakysoapbox.com/ Rich Wilson

      They’re not griping about the $850. They’re griping about the principle of the matter. The gripe would be the same if it were one cent.

      • http://www.poetrypoem.com/musicman Chris Murray

        Ohhhhhh, it’s a principle issue. Here’s what I see : Aa wants to be considered a religious organization JUST so it can get benefits it doesn’t deserve. In other words, lie your butt off to get what you want. Is that displaying good “principles”??

        • http://squeakysoapbox.com/ Rich Wilson

          Or, maybe it’s that AA thinks Churches are getting benefits they don’t deserve.

          You know, they’re not actually trying to be considered a religion. Hemant even highlighted that part for you:

          It would violate the sincerely held belief system of American Atheists to seek classification as a “religious organization or church” from the IRS.

          Of course you’re welcome to your own opinion as to whether those benefits should be equally available to all non-profits. But you’re also coming up with your own idea as to their motives, despite what they tell you.

          That’s kind of like atheists saying that Christians only do good things because they’re afraid of hell. That’s certainly NOT why most Christians do good things. It’s just the kind of shit people make up to attack other people, and has no basis in reality.

          p.s. Yes, AA has applied to be a religion in the past, mostly to test the equality of the system. Had they been granted the status, it’s not what they would have liked, but they would have had to admit that at least everyone was treated equally.

  • Numberqueen

    As a tax professional, this makes my day. I get so sick of the preferential tax treatment we give religious organizations. I try to explain these concepts to every client, friend and family member who will listen.


CLOSE | X

HIDE | X