January 17, 2008
Note to the IRS: Come and Get Me
Beyond the theatrical WSJ "call your bluff" ad.
Yesterday's Wall Street Journal ran a full page ad that was an open letter from Pastor Kenneth D. Taylor of Calvary Assembly of God in Algoma, Wisconsin, to the IRS regarding its enforcement of the ban on electioneering activities by tax-exempt 501(c)(3) organizations as that ban applies to churches. The letter was sponsored by The Becket Fund for Religious Liberty. Here's how the letter begins:
I am the pastor of a small church in northeastern Wisconsin that is a 501(c)(3) tax-exempt organization. We're writing today to call your bluff.
The IRS has said for years -- based on what we believe is a mistaken interpretation of the tax code -- that preachers can't support particular political figures or political positions in their sermons.
I'm not going to comment on the theatrics, but I will comment on some of the legal issues the letter discusses. It is true enough that the IRS has said that leaders of any tax-exempt 501(c)(3) organization (including, but certainly not limited to, churches) cannot endorse or oppose candidates for elective public office at official organizational events and in official organizational publications. The reason is that the IRS attributes these activities to the organization, rather than the individual, and thus views them as violations of the ban on electioneering that applies to tax-exempt 501(c)(3) entities. But the IRS has not said that preachers cannot support particular political positions in their sermons. Here's some of what the IRS has said on this issue:
Under federal tax law, section 501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office. However, section 501(c)(3) organizations must avoid any issue advocacy that functions as political campaign intervention. Even if a statement does not expressly tell an audience to vote for or against a specific candidate, an organization delivering the statement is at risk of violating the political campaign intervention prohibition if there is any message favoring or opposing a candidate. A statement can identify a candidate not only by stating the candidate’s name but also by other means such as showing a picture of the candidate, referring to political party affiliations, or other distinctive features of a candidate’s platform or biography. All the facts and circumstances need to be considered to determine if the advocacy is political campaign intervention.
Some sensitive issues can arise here, and I have had some criticisms for the IRS in terms of the ways it has handled certain matters in this area. But the flat statement that "[t]he IRS has said for years ... that preachers can't support particular ... political positions in their sermons" in inaccurate.
The letter from Pastor Taylor goes on to say this:
Last election I delivered a sermon based on Matthew 5: 13-16, which tells us that we are the salt of the Earth and the light of the world. ... Unlike many sermons at my church, we did not broadcast this on the radio or television. It was simply a sermon to my own congregation. I did however keep a videotape copy.
I challenge you -- if you still think it's the law -- to investigate what I preached that day...
The Becket Fund has posted some of the video of the sermon here. The problem with the video is that you cannot hear the whole sermon -- "censored" black-out frames pop up at various points throughout the message. This, of course, is an attempt by the Becket Fund to make a point. Again, I'm not going to comment on the theatrics. But I will say that this tactic does not make it easy to have a productive debate around these issues. Further, this kind of thing may have the effect of making pastors believe that the rules prohibit more than they actually do. It's completely fair game to criticize the rules, start a debate about them, and sue over them. But we should be as clear as we possibly can be about what the rules say and don't say, what is up for debate and what is not, so that people have the most reliable information possible and so that the debate focuses on the right issues. (By the way, if you'd like more guidance on these issues, you may find some here and here. I also should note that the letter makes a disparaging reference to Americans United for Separation of Church and State (AU). AU's response to the letter is here.)
The Becket Fund apparently believes that at least some of the application of these rules to tax-exempt churches is unconstitutional. I don't have time to address all the relevant issues now, but let me make one note. When the IRS revoked a church's tax-exempt status in 1995 for engaging in prohibited political activities, a church raised similar arguments. But in 2000 a federal appellate court affirmed a lower court's ruling in favor of the IRS in this case, saying that the revocation did not violate the church's free exercise or free speech rights. (Here's a more detailed description of the Branch Ministries v. Rossotti case.) In that case, the court said:
The Church asserts, first, that a revocation [of its tax-exempt status] would threaten its existence. ... The Church maintains that a loss of its tax-exempt status will not only make its members reluctant to contribute the funds essential to its survival, but may obligate the Church itself to pay taxes.
The Church appears to assume that the withdrawal of a conditional privilege for failure to meet the condition is in itself an unconstitutional burden on its free exercise right. This is true, however, only if the receipt of the privilege (in this case the tax exemption) is conditioned "upon conduct proscribed by a religious faith, or ... denie[d] ... because of conduct mandated by religious belief, thereby putting substantial pressure on an adher- ent to modify his behavior and to violate his beliefs." Jimmy Swaggart Ministries, 493 U.S. at 391-92 (internal quotation marks and citation omitted)....
The sole effect of the loss of the tax exemption will be to decrease the amount of money available to the Church for its religious practices. The Supreme Court has declared, however, that such a burden "is not constitutionally significant." Id. at 391; see also Hernandez v. Commissioner, 490 U.S. 680, 700 (1989) (the "contention that an incrementally larger tax burden interferes with [ ] religious activities ... knows no limitation")...
Nor does the Church succeed in its claim that the IRS has violated its First Amendment free speech rights by engaging in viewpoint discrimination. The restrictions imposed by section 501(c)(3) are viewpoint neutral; they prohibit intervention in favor of all candidates for public office by all tax- exempt organizations, regardless of candidate, party, or view- point. Cf. Regan, 461 U.S. at 550-51 (upholding denial of tax deduction for lobbying activities, in spite of allowance of such deduction for veteran's groups).
It seems to me that this judgment is likely to stand. Of course, any organization is always free to forego the tax benefits associated with the 501(c)(3) status and thus be unaffected by the restrictions -- including the ban on electioneering -- that come along with the benefits of that tax-exempt status.
This post originally appeared at Melissa Rogers's religion and public affairs blog. Rogers is visiting professor of religion and public policy at Wake Forest University Divinity School and founder and director of Wake Forest’s Center for Religion and Public Affairs. She previously served as executive director of the Pew Forum on Religion and Public Life and as general counsel of the Baptist Joint Committee on Religious Liberty.