Defining “Church” in American Law (original) (raw)
Related papers
21st Century Churches and Federal Tax Law
University of Illinois Law Review, 2024
Federal tax treatment matters to churches, the term the IRS uses for all types of religious congregations, including synagogues, mosques, and temples. The federal tax provisions most significant for churches and certain entities closely related to them, however, are not those that the public and commentators often assume. Exemption from income tax and the ability of donors to deduct contributions, the benefits that receive the most public attention, in fact provide surprisingly little benefit either to churches in the aggregate or to most individual churches. Their status as organizations tax-exempt under section 501(c)(3) of the Internal Revenue Code, moreover, imposes a variety of burdens on them. The burdens include limitations on lobbying and the prohibition on any intervention in campaigns for public office. At the same time churches enjoy special tax benefits not afforded to other section 501(c)(3) organizations, not even other kinds of tax-exempt religious organizations. These special benefits make church status appealing. Such benefits include exemption from filing with the IRS Form 990, an annual information return that, with the exception of the names and addresses of major donors, is also publicly available. In addition, the IRS cannot begin any audit of a church unless it complies with several procedures. These advantages limit oversight of churches by the IRS, the media, and the public. They create an incentive for religious organizations that share some traits commonly found in churches to seek status as a church. Two recent IRS grants of church or association of churches status have attracted sharp criticism from the media and members of Congress. At the same time, a number of developments, such as loss of membership, expansion of virtual worship, and recent Supreme Court Free Exercise jurisprudence, have created new challenges for churches and their tax treatment. In response to all these developments, this article recommends changes to the longstanding IRS approaches for defining “church” and certain church-affiliated entities. These changes would substitute a definition for church developed by courts and limit the definition for conventions or associations of churches to those of a single denomination. The definitional changes will clarify the distinction between non-church religious organizations and churches. Updating the understanding of “church” to reflect the twenty-first century realities of virtual participation and the increasing diversity of faith communities will also improve IRS oversight. This article also recommends that the GAO undertake a renewed study of campaign intervention by section 501(c)(3) organizations generally. This study will clarify whether all section 501(c)(3) organizations, including churches, are in fact violating this prohibition in ways that go beyond sporadic, minor, and usually inadvertent footfalls. In the authors’ view the recommended changes would benefit churches and the public because they take into account both current realities and current concerns. In so doing, they would not only give churches welcome guidance but also increase public trust that churches are not abusing the special privileges they enjoy under federal tax law.
The Church and the Tax Law: Keeping Church and State Separate
In a democracy characterized by the separation of church and state, what role does the federal government play in regulating the activities and the financial transactions of churches and other religious nonprofit organizations? What are the current federal requirements regarding tax exemption for churches, tax deductibility of donations to churches, and political activity by churches, and are these requirements justified? Rather than interfering with the free exercise of religion, does the federal government actually come closer to violating the establishment clause of the First Amendment by providing inappropriate tax benefits to churches and clergy? This paper discusses tax laws and federal court decisions relating to these and other issues.
Is Tax Law Different? Unconstitutional Conditions, Religious Organizations, and Taxation
Notre Dame Law Review Reflection, 2023
In common with other charities, religious organizations enjoy significant benefits under federal tax law, including exemption from income tax and the ability of donors to deduct their contributions for income, gift, and estate tax purposes. But these benefits are not costless. Also in common with other charities, religious organizations are prohibited from providing private inurement and private benefit, engaging in a significant amount of lobbying, intervening in political campaigns, promoting illegality, or acting contrary to fundamental public policy. The IRS takes the position that these limitations apply with equal force to all tax-exempt charities, including religious organizations. Some \= religious organizations have challenged the application of the lobbying, political campaign intervention, illegality, and fundamental public policy limitations on religious liberty grounds, invoking the Free Exercise of Religion Clause of the First Amendment and, more recently, the federal Religious Freedom Restoration Act (RFRA). To date, however, federal courts have rejected these challenges, concluding that they are permissible conditions on the tax benefits enjoyed by religious organizations. This essay reconsiders this conclusion and the arguments in support of it. One such argument is that tax law is somehow different from other legal contexts for purposes of applying the unconstitutional conditions doctrine to religious organization. The consistent refusal of the courts to allow free-exercise-of-religion-based exemptions from generally applicable federal tax laws suggests this may be the case. This difference could be viewed as a strand of the increasingly disfavored view sometimes referred to as “tax exceptionalism.” But I argue that this difference instead fits within the more traditional compelling governmental interest and least restrictive means analysis codified in RFRA and that arguably applied in the Free Exercise of Religion Clause context before the Supreme Court’s decision in Employment Division v. Smith. More specifically, tax law is different because of its complex rules applicable to all individuals and entities relating to expenditures for lobbying, political campaign intervention, and illegal activity. The complexity of these rules, and the risk that granting exemptions from them for any reason would undermine their uniform and consistent application, support the conclusion that the government has a compelling interest in not allowing exemptions, and that the existing limitations imposed on tax-exempt charities, including religious organizations, are the least restrictive means to do so. As a result, constitutional and RFRA free exercise of religion rights do not require exemptions for religious organizations from these existing limitations even when such organizations are motivated by their religious beliefs to engage in the limited activities. Furthermore, while this argument does not apply to the contrary to fundamental public policy limitation, the Supreme Court has correctly concluded that in the instances where there is a fundamental public policy, ensuring that tax-supported charities do not undermine that policy is also a compelling governmental interest and prohibiting them from doing so is the least restrictive means of furthering that interest.
Limits on State Regulation Of Religions Organizations: Where We Are And Where We Are Going
Columbia University Academic Commons, 2013
The breadth of activities and organizational forms among religious organizations rivals that of nonprofits generally, and religious organizations are vulnerable to the same types of problems that justify state regulation and oversight of nonprofits. Such problems include excessive compensation, improper benefits for board members and other insiders, misleading or fraudulent fundraising, employment discrimination, unsafe working conditions, consumer fraud, improper debt collection, and many others. Religious organizations are different, however, in that under federal and state law they enjoy unique protections from state regulation. This paper describes how such federal and state protections limit state regulation of religious organizations under current case law. It also explores the tension between the general ability of states to apply neutral and generally applicable laws to religiously motivated conduct and the special legal protections provided for some internal actions of religious organizations — particularly employment actions relating to ministers and certain internal disputes. It concludes by exploring how courts are likely to develop such limits in the future.
What is Caesar's, What is God's: Fundamental Public Policy for Churches
Harvard Journal of Law and Public Policy, 2021
Bob Jones University v. United States is both a highly debated Supreme Court decision and a rarely applied one. Its recognition of a contrary to fundamental public policy doctrine that could cause an otherwise tax-exempt organization to lose its favorable federal tax status remains highly controversial, although the Court has shown no inclination to revisit the case and Congress has shown no desire to change the underlying statutes to alter the case’s result. That lack of action may be in part because the IRS applies the decision in relatively rare and narrow circumstances. The mention of the decision during oral argument in Obergefell v. Hodges raised the specter of more vigorous and broader application of the doctrine, however. It renewed debate about what public policies other than racial discrimination in education might qualify and fundamental and also whether and to what extent the doctrine should apply to churches, as opposed to the religious schools involved in the original case. The IRS has taken the position that churches are no different than any other tax-exempt organizations in this context, although it has only denied or revoked the tax-exempt status of a handful of churches based on this doctrine. The emergence of the Bob Jones University decision in the Obergefell oral argument, along with developments over the past several decades both with respect to the legal status of churches and what arguably could be considered fundamental policy, render consideration of these issues particularly timely. This Article therefore explores whether there are emerging conflicts between a significant number of churches and what could be considered fundamental public policy, not only with respect to sexual orientation discrimination but also with respect to sex discrimination, sanctuary churches, and other areas. Finding that there are several current or likely future such conflicts, it then explores whether there are philosophical and legal grounds for treating churches differently from other tax-exempt organizations for purposes of applying the contrary to fundamental policy doctrine and the related illegality doctrine. Drawing on both the longstanding concept of “sphere sovereignty” and emerging work in the area of First Amendment institutions, the Article concludes that churches should not be subject to the former doctrine while still being subject to loss of their tax benefits if they engage in or encourage significant criminal illegal activity. The Article then concludes by applying this conclusion to the identified areas of current or likely future conflict to demonstrate how the IRS and the courts should apply the Bob Jones University decision to churches.
What Do Religious Corporations Owe for Burdening Individual Civil Rights
Changing Societies & Personalities, 2019
In the name of religious liberty, recent legislative initiatives by Christian nationalists seek broad legal exemptions from general law. This reflects an abiding antipathy to and a fear of the power of the state, the ultimate aim of which may be sovereignty for religious institutions. But, the claims of Christian nationalists are vulnerable to a series of critical objections. First, the rhetoric of religious liberty used by Christian nationalists plays on confusion between two senses of religious liberty-that of institutional religious freedom and that of individual freedom of religious conscience. These two senses need to be distinguished, since they are sometimes in fundamental conflict with one another, arguably to the extent of institutional religious freedom burdening individual religious conscience. Further, legal exemptions to general law that benefit particular religious institutions should also be recognized as gifts. They are not fundamental or inalienable rights. Therefore, granting such accommodations requires that religious communities benefitting from them should somehow reciprocate for their being exempted from common obligations under general law. In the United States, a consistent complaint argued on the part of self-appointed defenders of so-called "freedom of religion" and/or "religious freedom" is the vulnerability of religions over against an essentially Erastian state. For them,
2020
Many religious associations exhibit internal norms that differ from liberal norms and rules. Such norms often directly contradict the non-discrimination norms and rules that are part and parcel of the liberal democracies in which these associations operate. Religious associations often are considered, in both legal and scholarly writings, exempt from at least some of these norms and rules. This tension between broad societal non-discrimination1 rules and the norms of specific religious associations has won the attention of scholars and courts.2 In many such debates, the background assumption is that these religious groups are voluntary associations functioning within a model of separation between religion and state; that is, such associations operate through the free choices of their members and individuals are as free to leave the associations as they were to form them.3 While theorizing about non-discrimination rules and whether they apply to religious associations that are funded...
Tax Exemption of Church Property: Historical Anomaly or Valid Constitutional Practice?
Southern California Law Review, 1991
The practice of taxing church property while exempting other nonprofit groups appears to violate the “no special burden” principle of the free exercise clause. The Supreme Court case of Walz v. Commission charted a course between the free exercise and establishment clause. The Court argued from neutrality, separatism, and history to state that tax exemption of church property is part of an unbroken national tradition. However, the Court’s neutrality argument does not address constitutionality, its separatism argument is contrived, and historically, only established religions have been exempt from taxation. Past tax exemptions are rooted in two traditions: the common law adopted from England that granted exemptions to established churches, and the equity law tradition that granted exemptions to all churches. The common law tradition was restricted to certain types of church property of established churches, and the exemptions could be put on hold during times of emergency. The equity tradition gave churches another chance; ecclesiastical and charitable organizations could be tax exempt. These traditions continued uninterrupted in the early American republic. Three provisions ultimately provided ground for a challenge to the tax exemption of church property. The disestablishment of religion undercut the authority of officials to prefer one religion over the other. The truncation of the equity tradition removed the equitable privileges given to charities. Finally, equal and uniform taxation was considered a basis of American life. In modern theory, churches are seen as beneficial to society because they promote public morality, charity, and education. The law of equity is now based in statutory schemes or state constitutions, but the religious use of property is key to its tax exempt status. In the future, courts must find a via media between the eradication of exemptions and blanket endorsements.