Tax Lawyer's Blog

The Tax Code prohibits tax-exempt organizations from endorsing political candidates. 

Some see the regulation as a violation of pastors’ rights to free speech.  

USA Today reports that,  

Nearly seven months after defying a prohibition on endorsing candidates from the pulpit, 33 churches across the country are still waiting to learn whether the Internal Revenue Service will take action against them.

The goal of “Pulpit Freedom Sunday” was to trigger a legal fight and ultimately overturn regulations that prevent places of worship from supporting or opposing candidates for office. But a conservative legal group that organized the effort says the IRS has yet to notify the churches of any investigation.

The Alliance Defense Fund, the sponsor and organizer of the PFS, wants the government to challenge the churches so it can bring a first amendment action challenging the constitutionality of the law:

{Erik] Stanley, the ADF’s attorney, said the organization will continue its protests as long as necessary, holding annual Pulpit Freedom Sundays every year ahead of federal, state or local elections. If the IRS does not take action against future protests, he said, pastors will learn the regulation can be safely ignored.

So wiil the IRS take the bait?

Robert Tuttle, a professor of law and religion at George Washington University, had this to say,

It’s possible the IRS ignored the recent protest because it does not have an incentive to pursue the issue. It would be expensive for them to fight, and it would give people all sorts of reasons to say the IRS is evil and irreligious. It’s not like they’re going to recoup a lot of money. Their attitude is probably ‘why bother?’

But listen to John Witte Jr., director of the Center for the Study of Law and Religion at Emory University:

When similar violations occurred during previous presidential elections, the IRS took two or three years to introduce litigation to strip a church of its tax-exempt status.

Even so, if the IRS wanted to pounce on this, I think it would have by now. Perhaps it did not consider an investigation a wise use of resources, he speculated, or maybe the agency is occupied with more pressing cases.

Author’s Observations: 

• The Churches waived their employees right to free speech: The pastors’ first amendment rights are not being violated because those rights were waived when the church applied for and accepted tax-exempt (501(c)(3)) status. Nobody forces the church to be a tax-exempt entity. It choses that status itself and when it does so it agrees that in exchange for the granting of non-profit status it will not engage in political activity. Since the government is not required to confer non-profit status on an organization, it is free to impose any condition it so chooses.
• A donor of a gift has the right to impose conditions on that gift: This happens all the time. Wealthy people give millions of dollars to their alma maters in exchange for a building bearing their name. If the school doesn’t want to name the school after the donor, it does not have to accept the gift. But it can’t both accept the gift and then fail to do as the donor requested. The grant of tax-exempt status is in the nature of a gift or privilege and, therefore, the government is free to impose conditions on that status.
• Taxpayers should not be subsidizing political ideologies: When the IRS grants tax-exempt status to a church or other non-profit organization, taxpayers pay for it. I don’t believe it’s good policy to force taxpayers to subsidize a specific religion or religion in general. In fact, to do so might even be a violation of the establishment clause of the first amendment.

Have I missed something?

Tell me what you think?

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