Congressional Committee Addresses Religious Privilege in New Taxation Report

Congress’ Joint Committee on Taxation just released a report on recommendations to revise the U.S. tax code (which hasn’t been comprehensively revised in over 25 years).

Wait! Don’t fall asleep yet!

In one section, the committee highlighted comments and suggestions they received in regards to charitable and tax-exempt organizations, and it appears they took the advice (PDF) of the Secular Coalition for America.

It’s not quite “Tax the Church” but the message is “Don’t give churches any special privileges.”

The proposals submitted to the committee say:

Eliminate the following three special rules for churches: (1) the exemption of churches from the requirement that section 501(c)(3) organizations apply for tax-exempt status; (2) the exemption of churches from the requirement that section 501(c)(3) organizations file an annual Form 990 series return; and (3) the restrictions on church tax inquiries and audits under section 7611.

In English, that says the government should make churches apply for tax-exemptions (which they don’t have to do now if they meet general non-profit requirements), file a Form 990 (which tells the public about the church’s finances), and be under consideration for a tax audit (without the IRS having to jump through hoops to do so).

“We were pleased to see the Coalition’s recommendations included in the report and hope that the Committee will adopt the SCA’s recommendations in the final bill,” said Edwina Rogers, executive director of the Secular Coalition for America. “These are common sense reforms that level the playing field for all nonprofits.”

“Both Democrats and Republicans say they want to make the tax code simpler and fairer — if that’s what they truly want we have the perfect solution,” Rogers said. “Make it simpler by removing unnecessary language from the tax code and fairer by applying the same rules to all nonprofits regardless of religious affiliation.”

Obviously, there’s a long way to go before the recommendations become law, but it’s good to see politicians at least take these ideas into consideration. Let’s keep talking about them; let’s debate them.

There’s no reason for churches to be treating as any more special than other non-profit groups.

About Hemant Mehta

Hemant Mehta is the editor of Friendly Atheist, appears on the Atheist Voice channel on YouTube, and co-hosts the uniquely-named Friendly Atheist Podcast. You can read much more about him here.

  • Mackinz

    Cue the Christian Right complaining that their religious freedom is being trampled by a simple recommendation.

    Not like this has any chance of passing through the Republican-controlled Congress.

    However, it’s a start.

  • Pulse

    So the recommendations don’t automatically levy any new taxes on churches, they simply require churches to work for their tax-exempt status. I like it. Let’s do that.

  • JET

    We don’t even enforce current laws which prohibit tax exempt entities from engaging in political campaigning. Any time a church says “Vote for/against… ” they are in violation. The Mormon church single handedly defeated gay marriage rights in California. Enforcing current law would be a better place to start.

    • ortcutt

      If they had to file a Form 990s, they would have to report whether they engaged in electioneering and how much money they spent on electioneering. Requiring churches to file 990s would be the best way of enforcing the existing laws and regulations governing non-profits.

    • Stev84

      Technically they can’t campaign for candidates, but they can campaign for issues. Which just leads to do using code words to effectively say “Vote for the Republican!”

      • Mackinz

        Yet I remember more than one church telling its flock of poorly-educated people (who don’t fact check) “Vote for the Mormon, not the Muslim”.

        So they are breaking the law.

        But we already knew that.

  • Anon

    If I understand correctly, this basically says Churches have to file the same paperwork as “other” non-profits? Seems like the most basic expectation. This should only improve accountability to a minimum standard.

    What really needs attention are the parsonage tax exemption http://www.irs.gov/taxtopics/tc417.html and enforcement of political speach rules!

  • DougI

    Oh no, if the religious have to file paperwork like everyone else they’ll cry persecution. Because in fundy land equality equals Christian persecution.

  • Jason Sullivan

    Somehow they will find a way to say this helps create a national gun registry

  • Rain

    I always like to put “non-profits” in quotes because non-profits can pay themselves tons of moola. (For our Canadian friends: moola is slang for cashola. Yeah, the ol’ bling-bling. Yeah you know what I’m talkin, even though Canadians talk funny.)

    • ortcutt

      They are non-profits in the sense that no profits are distributed to shareholders, because there are no shareholders. That doesn’t mean that people can’t earn money to work at or manage non-profits. You are right though that there is excessive compensation at many non-profits, including many churches.

      • Rain

        Okay but it’s still a deceptive title since people can make profits from it. No doubt some non-profits take advantage of the deceptive title.

  • jdm8

    Then we’ll hear cries of oppression when their special privilege is taken away.

  • ortcutt

    Can you imagine if Benny Hinn, Creflo Dollar, and Joel Osteen had to file Form 990s? (I’m not accusing them of wrongdoing, but it would be great to know.) I can’t even imagine the amount of private inurement, private benefit, and self-dealing that is out there. There is certainly a huge amount of Unrelated Business Income Tax (UBIT) that isn’t being paid either. The part that churches would dislike the most though is that 990s are public. I’m sure that pastors really don’t want their parishioners reading about church finances and their total compensation.

  • http://www.facebook.com/matt.potter.73 Matt Potter

    I read through the recommendations from The Secular Coalition of America. It’s a quick read but is shocking in so many areas. As I grew up in an LDS family there was one particular paragraph about LDS finances that struck a cord with me. On the third page it reads, “Although its annual revenue is approximately half of the LDS Church, the American Red Cross spent twice as much money on charity in
    one year than the LDS Church did in 26 years.” The LDS church itself reported from 1986-2011, 26 years, it donated 1.4 billion while the Red Cross reported 3.1 billion just in 2011 alone. If they were treated like all the other secular 501(c)(3) I’m guessing they would have lost their tax exempt status long ago and that’s not even taking into account all the campaigning spent in California on Prop 8. I’m so glad to be free of that organization.

  • Cheryl in Tucson

    And of course, even though churches will kick and moan, they are NOT required to apply for nonprofit 501(c)3 status. In fact, my hats off to the Church of Satan for refusing to do so. I suspect many of us would agree with this church’s view on tax-exempt status for religious orgs. From its website:

    “The Church of Satan pursues a five point plan to move society in directions that are considered to be beneficial to Satanists. …The second point is the enforcement of strict taxation of all churches. This would remove the government sanction of religion and force these parasites to live off of their own members alone, and if they can’t, then they will perish as they should. The Church of Satan has never pursued tax-exempt status and challenges all the rest of the world’s churches to stand on their own feet. Let us expose the vampiric nature of the organized religions and see if they can withstand the light of day.”

  • FBG

    More dead trees. Simpler and fairer should mean less paperwork and more transparency. For all organizations. I’m sure what nonprofits have to fill out is a beast, and that is ridiculous.

  • A3Kr0n

    It’s a step in the right direction. Hopefully I’ll live to see the day when people lump religion in with water divining, and talking to the dead.
    Ya, I’m a dreamer…

  • http://www.facebook.com/people/Jan-Marra/1139453450 Jan Marra

    Oh no , they’re PERSECUTING CHRISTIANS!!


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