peterr – there have been calls to change the tax laws so that issue advocacy is not permitted by tax exempt non profits. what is your understanding of the ramifications of such a change if it were to be implemented? thanks.

Good evening Peterr

Well if money is free speeech then those without money have no right to be heard…it’s in the bibble!

The law for 501(c)3 non-profits — both religious and secular — is clear that issue advocacy and education is fine while candidate endorsement is prohibited.

That clinches it. Stripping the LDS or any other (tax-exempt )Prop 8 proponent of tax exempt status is a non-starter. Better to focus attention and energy on other methods.

How in the world would that work? And why would that be a good thing?

Colleges and universities would be prohibited from weighing in on anything related to education policy. The Humane Society could not speak publicly on animal cruelty. Etc, etc., etc.

Yes, the tax laws can be messy, but I prefer the messiness of what we have to trying to muzzle public speech on controversial issues — even when I disagree with some of the speech being made.

but peterr, i thought part of the issue with the lds prop h8 was that they had in fact crossed the education line.

am i mis-remembering this?

Why not just tax every organization?

Thank you Peterr for a wonderful, much-needed post.

Methinks this basket of issues will not be allowed to slip quietly into the shadows.
It needs a good shaking out and review in full sunlight.

I always appreciate your input and perspective.

That’s what I’m trying to clear up here.

Many people are under the impression that 501(c)3 groups can’t engage in the political process at all — not true. They cannot endorse candidates, and they cannot be so immersed in efforts to influence legislation that they devote “a significant part” (to quote the IRS) of their resources to political lobbying and such. This latter prohibition is designed to go after folks who want to create non-profit front groups to launder political contributions.

Many people are aware of the first prohibition, and extrapolate — incorrectly — to say that 501(c)3 groups can’t get involved in politics at all. That’s the big piece of misinformation I’m trying to correct.

I think that churches that have a reputation for being hierarchical and doctrinally strict like the Catholics and the LDS can’t duck and hide re their involvement in Prop 8 or say,as here, it was just a wayward priest. So while they can certainly say these things, they really need to have the moral courage and rectitude to be clear about what they do and do not support.

OT Peterr on PBS is a weekly show called I think Religion and Ethics. One story it covered was a union busting diocese in Scranton, PA trying to keep teachers at its schools from organizing and punishing those involved. Lots of breast beating and invocations of church-state separation but in most cases parochial schools do get government help. So I suppose that church-state separation is only a sometime thing. But a very interesting story nonetheless.

so we are helpless when a megachurch throws millions and millions of dollars into influencing voting (since it is not legislation and they are not a front). what is to stop a megachurch from creating a voted upon theocracy for a state that is in line with their church doctrine?

Congress — in its wisdom and/or folly — thinks that groups that are “not in it for the money” should be allowed a break from taxation. With churches, there is the added concern for not influencing religious behavior (in the spirit of the first amendment).

The exemption from taxation is seen as a way to promote a social good: education, in the case of schools and colleges; care for the poor in the case of the United Way, etc. The same can be said of the March of Dimes, Heifer International, and a host of other charities, including churches. By exempting such groups from taxes, Congress is trying to increase the “good works” of such groups.

Seriously, just get over charitable contributions on the tax code. If someone is truly being charitable, they wouldn’t mind contributing to the USA. It’s all too convoluted.

i’m not advocating it – although i don’t know that i disagreed. just wanted to check in with you and/or revdeb about it. maybe it’s obvious to others, but not me. in fact i was confused as to whether such a change to the tax code was what was being advocated / supported. now i think that was it…. but i may very well still be confused.

thanks for your take. much appreciated.

If a megachurch does this, they are walking perilously close to that “no significant part” line. If you have a budget of $10 million, and $5 million goes to political work, you are going to be in serious trouble with the IRS. That’s where even not being a front group will protect them.

It’s a sticky line, trying to define what is and is not a church, as opposed to what is and is not a political action committee. The IRS, for better or worse, tries to measure the portion of an organizations time, money, and other resources that are put into political work and weigh that against their non-political activities — and if you end up too far on the political work end, they say you are no longer tax exempt.

Peterr, just out of curiosity, do you know of any churches or religious organizations that encouraged people to vote “no” on Prop 8? I’m guessing there must have been some, albeit not on the scale of those supporting 8.

When some anti-tax folks wanted to eliminate my rural library district, it was acceptable for the local branch of AAUW to publicly oppose the measure. The American Association of University Women is under the 501-c3 designation. Be careful what you ask for in this situation with Prop 8, because the unintended ramifications may be far worse than expected.

The interesting part of the story: The measure to keep the rural library district passed with two percentage points more than the measure that created it three years prior. Several members heard people saying they were opposed to the library district and were going to vote NO. The funny part was a NO vote meant KEEP the library district. Amazing what happens when a person doesn’t read that well.

I understand, but seeing people (and mostly the very wealthy) giving their money-on the basis of how it will help them to pay less in taxes-is just veneer. Everyone knows it, everyone accepts it, and we are going down. How many of these charities would exist without tax-exempt status?

The humane society doesn’t threaten people who didn’t vote for animal-rights propositions with not allowing them to adopt pets.

One thing that churches need to learn is that off church property they have no real control of what people say, do, and think, even if those churches consider their head to be G-d on Earth (or next thing to that). They also need to learn that they have no control over non-members.

(Here I’m going to add that some of those animal-rights propositions might be handled better by laws and regulations; when your legislature seems to be gridlocked most of the time, things can end up on the ballot that probably shouldn’t be there.)

“what is to stop a megachurch from creating a voted upon theocracy for a state that is in line with their church doctrine?”

That’s what’s officially known as “Utah”.

but isn’t that what the lds church did with prop h8? iirc, something like $40m into ads sure seems like it is ’significant’ to me.

Catholic Church and Labor, unions and the parochial schools

Yes, I originally thought that Peterr might go for the angle that the Be Divine post was equating treatment of gays to that of farm animals. But not so.

The LDS would have to be considered a super-mega-church. I have no idea what their annual budget is but I suspect $40 million is a small fraction of the total. Also, they probably raised more than that simply because they were promoting Prop 8.

I do, but as you say, they were not on the same scale as the LDS, nor did they get the same publicity.

ot wrt taxes, but on topic for lds. a couple of nice lds folks stopped by yesterday. i still occasionally talk them – although not with my previous desire to take revenge on those who try to tell me that all of life’s answers are to be found in a literal reading of the bible. did not bring up prop h8, but would like to next time they stop by. peterr, can you or anyone else direct me to some bible based resources to argue from? thanks.

Thanks for addressing this for us, Peterr.

No, the LDS as a body did not (from what I saw) pump that money directly into Yes on 8 ads. They encouraged their members to donate to Yes on 8, and those groups bought the ads.

From the standpoint of the IRS, these are two very different things. The former is the act of the organization; the latter is the act of individuals.

Very timely post, Peterr. There’s a lot of misinformation out there, thanks for clearing it up.

Again, I just think there needs to be a fair balance. If I decide tomorrow to get a ministry and fill out all of the necessary paperwork and pay the licensing fee, I can start the Church of the Holy Pinto Bean. Tax exempt!

It’s just crazy. Maybe my church should pay 5%?

so a church telling its parishioners they have to donate and provides transport for busing in hundreds of ‘volunteers’ to overwhelm any non-mega-church opposition gets a pass since its members, and not the church directly, are donating and they are not ‘organizing”?

Here’s some info on the relationship of tax status and churches. They can’t funnel funds into political activities without keeping pools of funds distinct. That’s more a way of preventing donors from getting tax breaks for a political contribution than anything else.

http://pewforum.org/events/?EventID=60

Affecting policy in the USA. Should be taxed.

As you are probably already aware, the premise of LDS is that the Bible as written contains fundamental flaws and that more recent prophets have endeavored to correct it, hence the name “Latter Day Saints.” I suspect you’d have trouble convincing them using any interpretation of the Bible that doesn’t gibe with theirs.

Not sure that link works.

I appreciate how the founders of our country wanted to move away from the European model where the state runs the church and taxes the populace to pay for it. I also appreciate that taxing now-exempt charitable organizations could be an undue burden for some smaller groups. I don’t buy the dichotomy here though — that the choice is either tax or no tax. There are thousands of ways the tax code could be amended to create more fairness. It seems quite logical as a way of preventing an immoral majority from bullying the weaker minority, in this case the extraordinarily wealthy Mormons/Roman Catholics/Evangelicals/Fundamentalists systematically destroying the civil rights of the GLBT Americans.

Separation of church and state is a sound principal. Why isn’t the argument about why a tax-exempt religious group has successfully codified their religious dogma in several state constitutions all without paying a penny of tax to support the very states whose constitutions they seek to rewrite?

In today’s America, when many of these religious organizations are actively seeking a seditious overthrow of the government to replace it with a particular theocracy that appeals to them it doesn’t feel right that religious or secular thugs can unduly influence politics and lawmaking while flying under the radar of the tax code. I think it is time to level the playing field a bit and stop subsidizing private religious beliefs through default by allowing religious organizations to amass vast amounts of property and money wealth, tax-free, and then using that wealth to manipulate the political process.

Digg it.

that’s right, thanks, i had forgotten – will have to see if i can find my old book of mormon. this was, i think the third of fourth visit from the same person (although she comes with a different partner each time). so far she has only wanted to read the bible to me. perhaps that is the recommended approach? anyway, thanks for triggering that old memory. want to do some prep work.

forked-tongue jesuits and flat headed jacobins will eventually be the downfall of us all ..

Oh, for ten years my neighbors were Mennonites. Both the LDS and Jehovah Witnesses avoided our neighborhood because of them. It appears those church leaders don’t want people like the Mennonites who so clearly practice their faith having a corrupting influence on their young people. Alas, the Mennonites have moved and we are now back on the visitation list.

Is there any language in the Constitution about the separation of animals and the state? No. It seems flawed to narrowly interpret tax law and draw an equivalency between a religious organization and the Humane Society. Organized religions are de facto governments for their followers, operating in parallel with the federal government. The whole point of separation was to keep the very powerful influence of religious beliefs from dictating direct government action, and to protect smaller religions from being shut out by a “state” religion.

Personally I’m of the mind that tax exempt status for all religions should be eliminated, it’s become a growing corrosive within our society. The larger religions are finding their ability to raise money is a great boon to creating huge media empires with growing mainstream influence (Mac Hammond’s Living Word and Rich Warren’s Saddleback Church as examples), and now the LDS organizing a massive, deceptive political mobilization.

We talk about the influence of lobbyists on our government, and how that has skewed the way our politicians enact legislation. I submit that these tax-free religions are bypassing the government officials and taking their unhealthy influence directly to voter initiatives and constitutional amendments.

Agreed. And then there’s the issue of the “Faith-Based Initiatives” that funnel millions of taxpayer dollars to these organizations and then allow them to proselytize and discriminate at will. I don’t see Thomas Jefferson or Ben Franklin or even James Madison approving of the current state of affairs regarding religious organizations in America.

Separation of church and state is a sound principal. Why isn’t the argument about why a tax-exempt religious group has successfully codified their religious dogma in several state constitutions all without paying a penny of tax to support the very states whose constitutions they seek to rewrite?

am not disagreeing – but would like to point out that in MA many religious groups worked to in support of the rights of gays to marry. don’t remember anyone objecting to that – although maybe we should have?

I don’t see Irs taxation as inconsistant with freedom to do charitable works.
If the church takes in X dollars and spends X dollars doing good, then it has income of zero. No tax.
If it takes in X dollars and spends .7X on good works, .2X on political activity, and .1X on the pastors lavish lifestyle (over and above some certain standard), then it should pay tax on the .3X net income.

When the issue was promoting the civil rights of African-Americans, many churches were on the forefront of that issue — yet few on the progressive end of the spectrum called for ending the tax exempt status of these churches at that time.

Face it — everyone, religious and non-religious — wants society to reflect their most deeply held beliefs. That’s “the American way,” to coin a phrase.

When it comes to money and political influence, the amount spent by all religious groups is dwarfed by that spent by corporations, unions, trade associations, political parties and their PACs. To claim that somehow a few churches are going to overwhelm the financial influence of these secyular groups is laughable on its face.

(This is not meant to demean or diminish the pain caused by the approval of prop 8 — just to put the argument about undue religious influence in politics into a bit of perspective.)

i am truly not trying to be a blogwhore peterr,

but please read my diary
http://www.flickr.com/groups_m…..tab=member

i keep saying that i know people of all faiths, that i see what you all are saying. but you are missing that there people who don’t want to get it. they don’t have to. but my point is, it doesn’t matter, we do.

my computer is way slow, so, turtle with the spunky bullhorn signing off.

When it comes to money and political influence, the amount spent by all religious groups is dwarfed by that spent by corporations, unions, trade associations, political parties and their PACs. To claim that somehow a few churches are going to overwhelm the financial influence of these secyular groups is laughable on its face.

I suppose that the same could be said about Israel and AIPAC but look how that worked out.

Once you get Congress or the IRS involved in setting or approving a pastor’s salary, you’re getting them into the religion business. Are you sure that’s what you want?

A few years ago I attached a small No Soliciting sign to my front door and believe it or not, it actually appears to have deterred them.

bad linky dmac

or maybe not

I must respectfully disagree with your assertions here Pererr. The Roman Catholic church alone holds more valuable property and wealth in the United States than any other organization I am aware of. The Mormon church has a near-theocratic hold on the entire state of Utah, holds millions of dollars tax-free, and has made significant inroads in several other Western states. Then there are the hundreds, if not thousands of other flavors of Christianity. I’m not implying that they work in lockstep to influence politics but it is ridiculous to say they do not have significant influence on the political process in the US. To imply that religious organizations are small players is laughable. The entirety of wealth and property escaping taxation through religious organizations would most likely pay off the national debt quite easily.

As to the political influence purchased with this wealth, that is subjective, I suppose. That’s why Obama and McCain debated at Rick Warren’s church and they tripped all over each other making sure everyone knew they were good Christians throughout the campaign. And that’s why Elizabeth Dole tried and failed to destroy her opponent with the “atheist” label — failed because it was a blatant lie, I might add. Try running as an atheist or a Wiccan or even a Buddhist for a statewide or national office and see how much influence religion has on our political process. Unions, corporations, trade associations, and political parties only wish they had such captive audiences with such open purses that they can threaten with damnation if they don’t toe the line….

It doesn’t have to be an either/or wrt taxation, I still maintain. If religious groups want to be politically active then by all means they should be while playing by the same rules all these other organizations do.

I think it’s pretty easy to see the difference betwen well-compensated and lavish. We s urvived the end of the three martini lunch. We set salaries for retired people, for reasonable and customary fees for medical procedures, for military men to die for their country, why not what is reasonable for a pastor.
Yes, that is what I want.
Disclosure, I live about a mile away from the church that took over and renovated the Summit, an NBA stadium, for their Sunday get-togethers. I know Lavish when I see it.

re: elliot’s link. maybe something similar?

I am on a board. I did due diligence on this issue.

Here is something I found quickly on Non-profits and lobbying.

http://www.mncn.org/lobbylaw.htm

Teddy is upstairs!
h8er Won’t Get My “MILK” Money

I generally like to see churches get their members involved in the political process, even if I disagree with their beliefs.

That said, there are couple points I’d like to introduce. First, it’s not as simple as a mere “distinction between issue-advertising and candidate advertising.” There’s also lobbying on behalf of specific legislation, which falls between those two examples. It’s not forbidden the way a candidate endorsement is, but it’s not the same as advocating on a general issue. I would argue that a state constitutional amendment is a form of legislation — or at least close enough to justify an IRS interpretation to that effect.

Second, 501(c)3 does not use “a significant part” as the test, as you claimed in response #9, but “no substantial part” which is, I would argue, a much stricter standard. “Significant” would gauge the money spent on lobbying against more prosaic expenses, and for a church that probably spends $3 billion a year, it would have to be an astronomical amount.

But what is “substantial?” If they directed $20 million to Prop 8’s passage, that’s substantial, regardless of how big they are. To them, sure, it’s insignificant. But it’s clearly substantial. So substantial, they’re bragging about how they got Prop 8 passed.

If you take a local stake, and count up how many hours were spent in church-sponsored meetings, discussing Prop 8 and organizing the GOTV, is it “substantial”? Considering their bishops and stake presidents are unpaid, the true measure would be what percentage of time they spent advocating Prop 8.

Finally, I have heard rumors that LDS members were encouraged to donate to protectmarriage.com, which then reported back to local stakes who donated, and how much, and that a donation could be used to offset tithes. If that’s true, it means the LDS is being cute. Even though the money didn’t go through their hands, it’s clearly not a hands-off approach. And although LDS members can’t write off their prop 8 donations, it still looks bad. After all, why would the church go to such lengths, if not because they were worried about the “no substantial part” clause of 501(c)3?

But really, I find fault with me and every other Californian for putting up with such a goofy way of running our state. We voted for term limits and we do everything we can to keep our state assembly powerless, and so to get anything done we have to put it on the ballot. And to require 2/3 vote to raise taxes, but a bare majority to write discrimination into the state constitution? That’s absurd.

The IRS already is in the religion business, insofar as they get to say what is and isn’t a religion for federal tax purposes. For example, as determined by the IRS, Scientology was a religion, then it wasn’t, and then it was again. Further, were the IRS to determine during an audit that a pastor’s compensation was excessive, it could act on that determination in any number of ways, ranging from none to some kind of financial penalty via the intermediate sanction excise tax to revocation of exempt status. And who could forget Congress’s dramatic passage of the Clergy Housing Allowance Clarification Act of 2002? :)

Nonprofit tax law is an arcane and complex little area of practice, technically speaking and it’s also an irrelevant one for the vast majority of (c)(3) and (c)(4) exempt organizations. Last time I checked, financial transactions by exempt organizations were approximately equal to ten percent of the annual GDP. Which puts them a few percentage points above the securities industry and represents an enormous amount of money changing hands, none of which is subject to any systematic federal oversight of any kind whatsoever for practical purposes. The IRS doesn’t have the resources to do a lot more than follow up on a very small number of dubious entities about which they learn primarily from letters of complaint or the press, although it’s conceivable that someone who was capable of understanding a corrupt EO’s Form 990 might uncover its hijinks while reading it. But the odds of that remaining strictly in the realm of concept are overwhelmingly on the side of the putatively corrupt EO. The personnel just aren’t there. And for churches and religious organizations, it’s a non-issue altogether — they’re not required to file 990s unless they feel like it. In any event: There actually are some regulations and guidelines governing politically-related expenditures by (c)(3)s that go beyond the issue-advocacy/endorsement dichotomy, at least in theory. But my point is: The real problem is much, much bigger than even the millions tossed at Prop 8 by the LDS, its members, subsidiaries, and/or related-party entities. There are oceans of money sloshing around the nonprofit sector, to which no one pays any attention at all. That’s a very attractive set-up to anyone who has some cash that needs a place to stop and launder itself before turning up wherever it’s ultimately headed, and there’s no reason to think those don’t include places where they might directly benefit political parties, officials, and interests in any number of ways. And it never hurts to bear that in mind. It might come in handy some day.

Thought crystallizing overnight:
It isn’t that these churches are advocating for or against propositions, it’s that they’re advocating that their moral views should be written into law, regardless of the views of other churches, or of any individuals.
To me, that’s where they cross the line: wanting their own views privileged over those of every other church.
I also think that the RC claim to speak for all Christians everywhere is bogus, and they need to be called on that at every opportunity. (Read Garry Wills’s book Papal Sin for a better historical view of the Vatican and its involvement in politics. They haven’t learned anything in centuries; John XXIII was an anomaly.)