Can Charitable Status Be Removed From Religion?

[Beerina]

If I build a million dollar restaurant on the outskirts of town, I have to pay substantial money to the government to cover the costs involved; I may see a nice profit myself on the outcome, but only after "society" has taken its share. If I build a million-dollar soup kitchen to feed the local homeless population, the government will typically give me a break on the money that I owe them, because I'm benefiting society and not myself.

What country do you live in where businesses have to pay massive amounts to the government before you can even begin the business? No f***ing wonder European economies are on the ropes chronically.

Here's a clue -- what you describe is bad, not something to brag about. "Society" can loot their "share" if and when the business succeeds. Hundreds of economic "experiments" last century demonstrated this was the most productive way for the de facto and de jure "necessary evil" parasite of government to profiteer off people surviving and earning a living for themselves.

 

[drkitten]

What country do you live in where businesses have to pay massive amounts to the government before you can even begin the business?

What I described was the United States tax structure, although almost any country will require that. How do you think I acquired the land and materials to build my business -- and how many of those transactions were taxable?

If you can build a commercial building without paying a cent of taxes before the business is even complete, I'd like to know what country you live in.....

 

[drkitten]

For me, it would be instructive if someone could provide an example of an organization that has some similar characteristics as churches, but isn't eligible for a tax deduction. [...]

What I'm getting at is that I don't think churches get "special treatment". I think they are just the largest member in a class of non-commercial groups that all get the same treatment.

US Law?

Here's an example -- zoning laws. Churches are, under both Federal and state law, exempt from much of the zoning regulations that other organizations are subject to. (in particular, the standards under which the zoning board must grant variances are much looser for religious organizations than for secular ones.)

As simple hypothetical example, a city might have a building height restriction ("no buildings shall be taller than 100'") A university in that city would not be able to exceed the maximum height and would not have standing to sue to force the zoning board to grant them the variance -- a church would.

 

[Meadmaker]

The case you linked to was a slightly different situation. In that case, a law was passed that specifically targeted the activities of a church, and the question was whether that law unfairly targeted religion.

The hypothetical example you posted was slightly different. In that case, there is a hypothetical law that applies equally to everyone. Sure, the church could sue claiming that it was an unfair restriction on religion, but it would be a difficult case to win. They would have to show that there was no rational basis for the law, or that the law violated a fundamental right, and the state had no compelling interest in limiting it. I doubt the religious group could successfully persuade the judge that 101' tall buildings were a fundamental right.


At any rate, my question was intended to refer to "special treatment" for tax purposes. I was wondering if churches were granted special treatment not available to other not for profit organizations. My guess is that they are treated pretty much the same as my hypothetical tiddlywinks association, with a couple of narrow exceptions that aren't all that significant. (e.g. the aforementioned "housing allowance". It's a bit unfair, but not enough to get all worked up over.)

 

[drkitten]

The case you linked to was a slightly different situation. In that case, a law was passed that specifically targeted the activities of a church, and the question was whether that law unfairly targeted religion.

Er, wrong. It specifically targetted an activity, which was prohibited generally.

If instead of a church being involved in that particular activity, it had been a private foundation (or a university), the foundation would have had no statnding to sue.

The hypothetical example you posted was slightly different. In that case, there is a hypothetical law that applies equally to everyone. Sure, the church could sue claiming that it was an unfair restriction on religion, but it would be a difficult case to win.

No, it would not be a difficult case to win.

They would have to show that there was no rational basis for the law, or that the law violated a fundamental right, and the state had no compelling interest in limiting it.

That's exactly wrong.

The relevant laws -- including the Religious Freedom Restoration Act of 1993, a later 2000 act whose name I don't remember, and a zillion state laws -- make it clear that that process does not apply in the case of Churches.

What you describe is the process that the university would need to follow. By contrast, under the terms of the relevant laws, the State would have to establish (under a standard of "strict scrutiny") that it has a "compelling" interest in controlling the height of the building.

I doubt the religious group could successfully persuade the judge that 101' tall buildings were a fundamental right.

They woudn't need to. Here's the text of the law:

a) In general
Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.
(b) Exception
Government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person—
(1) is in furtherance of a compelling governmental interest; and
(2) is the least restrictive means of furthering that compelling governmental interest.

The phrasing is very clear. The Government cannot burden the exercise of religion, even if the burden results fro ma rule of general applicability. It doesn't matter if the burden violates a "fundamenal right" or not, as long as the burden is "substantial" (and the inability to build a desired building is plainly substantial).

At any rate, my question was intended to refer to "special treatment" for tax purposes. I was wondering if churches were granted special treatment not available to other not for profit organizations.

They are. They are, for example, not required to apply to the IRS for registration and recognition as a charity for tax purposes; if I create the Church of Drkitten, it is automatically tax-exempt, but the Drkitten Foundation must jump through a number of hoops regarding purpose and such. Similarly, churches are exempt from the requirement to file a form 990 with the IRS -- again, the Drkitten Foundation has to report periodically on the use of its funds to the IRS (and if it misuses its funds too grossly, it will have its charitable status revoked); the Church of Drkitten is under no such scrutiny.

My guess is that they are treated pretty much the same as my hypothetical tiddlywinks association,

Nope. The IRS will be checking on a regular basis to make sure that your tiddlywinks association actually spends its money on tiddlywinks and not on gold-plated yachts for the president of the association. Churches are under no such scrutiny until and unless they cross the line into active fraud.

 

[Meadmaker]

Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability,

The phrasing is very clear. The Government cannot burden

Yes indeed the phrasing is very clear, and when you said how clear it was, you left out a word. That word is very important, and when you reinsert that word, it changes the meaning...ummm...substantially.

 

[drkitten]

Yes indeed the phrasing is very clear, and when you said how clear it was, you left out a word. That word is very important, and when you reinsert that word, it changes the meaning...ummm...substantially.

Yes, and as I pointed out, the inability to build a desired building can easily be a "substantial" burden. The difference between a 101-foot and 100-foot building is not necessarily "substantial," but the difference between a 100- and 200- foot building almost certainly is.

The differing legal standard should be clear: The government can "substantially burden" the activities of a secular charity as long as the restriction has a "rational basis" and does not violate "fundamental rights." The basis need not be "compelling," but only "rational," and the restriction can be as restrictive as the government likes as long as it remains rational.

ETA : Another good (real-life) example of this are the "annual distribution requirements" that apply to charitable organizations and foundations. Such (secular) charities are required by law to distribut not less than some percentage of their total capital each year -- I'd have to look up the exact number. This is obviously a substantial burden, but it (of course) has a rational basis.

Churches, by the law I just described, have no such requirement -- and no such requrement can be placed upon them. Your church can collect as much money as it wants, even in a fund explicitly labeled for some purpose, and then spend as little or as much as it likes to further that purpse. Collect a billion dollars for Hurricane Katrina relief, and actually distribute a nickel.

If you actually have a substantive comment to make, I invite it.

 

[Meadmaker]

Er, wrong. It specifically targetted an activity, which was prohibited generally.

It prohibited an activity generally. It passed the law right after a pastor announced plans to participate in that activity. In other words, the pastor's activity was the target of the law.

I also note that it was a lawsuit filed, not a lawsuit won. I would be somewhat surprised if the pastor actually won the suit on grounds of religious freedom, but stranger things have happened.

No, it would not be a difficult case to win.

I suppose ceo_esquire is more qualified than I to comment on possible lawsuit victory, but I have never heard of a similar case that actually did win, and I have heard of similar cases that have lost. If you could provide an example of a case where the plaintiff was a church or religious organization, and won, then you could probably have a point.

They are. They are, for example, not required to apply to the IRS for registration and recognition as a charity for tax purposes;.....

Well, yes, they are exempt from certain paperwork filings that other organization must perform. I, for one, would have no objection if that exemption were eliminated, but I can't see this as an example of some sort of injustice.

 

[Meadmaker]

Churches, by the law I just described, have no such requirement -- and no such requrement can be placed upon them. Your church can collect as much money as it wants, even in a fund explicitly labeled for some purpose, and then spend as little or as much as it likes to further that purpse. Collect a billion dollars for Hurricane Katrina relief, and actually distribute a nickel.

Again, I would invite ceo_esquire to interpret the law from a more rigorous perspective, but I do not read the law the same way you do. I have heard of cases where pastors have been prosecuted for fraud in cases like your hypothetical Hurricane Katrina project, so I suspect that the law is not as generous to religious activities as you would credit it.

 

[ImaginalDisc]

Again, I would invite ceo_esquire to interpret the law from a more rigorous perspective, but I do not read the law the same way you do. I have heard of cases where pastors have been prosecuted for fraud in cases like your hypothetical Hurricane Katrina project, so I suspect that the law is not as generous to religious activities as you would credit it.

There is a difference between prosecuting a pastor who promises to provide disaster relief and humanitarian aid with your donations for fraud when he fails to do so, and prosecuting him for fraud when when he fails to pray hard enough at god to cure your cancer or to get your puppy into Heaven in exchange for your "donations." IMO, there shouldn't be, but I digress.

 

[drkitten]

Well, yes, they are exempt from certain paperwork filings that other organization must perform.

Um,.... wow.

Why do you think the paperwork filings are there? The IRS doesn't ask for information for the hell of it. The 990 form is the primary method for evaluating the finances of a charity.

From one of the New York charity oversight groups:

The Form 990 serves two essential purposes. First, it provides information that helps government agencies (the IRS and state charity regulators) enforce the laws that govern nonprofits. For example, it helps government regulators learn whether groups have been spending their funds in a way that might cause them to lose their charitable and tax-exempt status. Second, the Form 990 provides a great deal of financial information about the filing organization’s financial condition, about its financial strength or weakness and about such things as the sources of its income.

So, for example -- is your church violating the law regarding lobbying activity? We don't know -- your church isn't required to tell us. Is your church engaging in land fraud? We don't know -- your church isn't required to tell us. Is your church violating minimum wage laws, or contributing to international narcoterrorism? We don't know -- your church isn't required to tell us.

I can't see this as an example of some sort of injustice.

I can't see this as anything but.

 

[hammegk]

What's the "public good" that tax-free housing allowances for clergy encourages?

I invite the general readership to research this point, and at the time look too at the "public good" of organized religions. I suspect you can manage 'nil' or even negative if you're careful in your analyses.

Then please contact the political representatives of the party you support(whom I have every expectation will be the most liberal party) making every effort to convince them to make "tax religion" a part of their platform, local and national.

Please?

 

[Meadmaker]

I guess the government figures that churches are somewhat self policing, with the congregations keeping an eye on clergy. That was probably more true in years past than today. Also, there's the whole separation and church and state thing. Government demanding a lot of reporting from religion was probably seen as unjustified interference in church affairs.

I can't figure out why the rules ought to be different today for churches, but unless there's a real problem, I can't see any good reason for changing the rules.

I can't see this as anything but.

I guess you aren't like most people. I can't see how these rules are a real problem, but then again, I don't see a problem with parochial schools either. Takes all kinds to make a world.

 

[blutoski]

In the case where there is an intermingling between religious and charitable duties, creating a separate tax-exempt charity wing with strong tax supervision would solve the problem.

This is what the 'faith-based-initiatives' legislation was about: simplifying the bookkeeping so that the charitable operations and assets did not have to be held at arms-length from the religious stuff.

The fact is: religions have been doing this bookkeeping from day one already, if they want to apply for government grants. There is a precedent, a set of best practices, &c.

It's extra work, but if you're serious about doing charitable work, there should be no grousing about a bit of planning: in the past it has meant the charitable operation would qualify for additional public funding.

The only churches that balk at the proposals for legal separation of religous/secular operations are those who know they provide little or no secular benefit.

 

[Beerina]

What's the "public good" that tax-free housing allowances for clergy encourages?

The People view religion as an important, integral part of their lives, and thus define this as a public good since it makes it easier for the clergy to live -- if they are taxed, the population has to donate more money every Sunday to achieve an equivalent lifestyle for the clergy.

Oh, and by the way, for the socialists out there, merely not having the government squatting like an eight hundred kilo vulture on everybody's shoulder, taking dibs on the food before you put it in your mouth is a public good. Also, in a free country, people don't define "permitting things" to be conditional to whether it is a "public good" or not. One presumes freedom, and then outlaws things that are harmful.

I invite the general readership to research this point, and at the time look too at the "public good" of organized religions. I suspect you can manage 'nil' or even negative if you're careful in your analyses.

This I don't deny one bit. But we've done a good job already of pushing religion to the status of "harmless lifestyle choice".

Then please contact the political representatives of the party you support(whom I have every expectation will be the most liberal party) making every effort to convince them to make "tax religion" a part of their platform, local and national.

Please?

I would only recommend this to politicians I want to lose, and lose badly, at the next election. Or better yet, never even make it past the first primary.

 

[joobz]

Then please contact the political representatives of the party you support(whom I have every expectation will be the most liberal party) making every effort to convince them to make "tax religion" a part of their platform, local and national.

Please?

I think you are looking at it backwards.
Contact the representatives and convince them to expand the special circumstances of religion to be applied to everyone, or at the very least businesses. WEll, at least this is what concervative reps are suggesting.

 

[hammegk]

I would only recommend this to politicians I want to lose, and lose badly, at the next election. Or better yet, never even make it past the first primary.

Shh. It was supposed to be a secret.

 

[ImaginalDisc]

This is what the 'faith-based-initiatives' legislation was about: simplifying the bookkeeping so that the charitable operations and assets did not have to be held at arms-length from the religious stuff.

The fact is: religions have been doing this bookkeeping from day one already, if they want to apply for government grants. There is a precedent, a set of best practices, &c.

It's extra work, but if you're serious about doing charitable work, there should be no grousing about a bit of planning: in the past it has meant the charitable operation would qualify for additional public funding.

The only churches that balk at the proposals for legal separation of religous/secular operations are those who know they provide little or no secular benefit.

I think this is not correct. These "faith-based initiatives" were tools for chruches to get their grubby hands on money earmarked for charitable purposes so they could make it vanish into the depths of their tax-exempt coffers.

Perhaps that is cynical, but a key part of my proposal involved making religiously run charities suffer more scrutiny, not less.

 

[The Atheist]

Damn right! Get rid of that charitable status right now. Just get your chequebook out to take care of these...


Poverty in USA

More poverty action in USA

More soup kitchens!

Even more of them

Homeless shelters?

Housing for the elderly?

Maybe those druggies?

70 million people living in 3rd world poverty

 

[ImaginalDisc]

Damn right! Get rid of that charitable status right now. Just get your chequebook out to take care of these...


Poverty in USA

More poverty action in USA

More soup kitchens!

Even more of them

Homeless shelters?

Housing for the elderly?

Maybe those druggies?

70 million people living in 3rd world poverty

You do realize that you're undermining your own case, yes? If the U.S. is conspicuous amoung first world nations for religiosity, which it is, and the U.S. has high poverty rates, which it does, that becomes difficult to reconcile with the idea that religiosity correlates with charity, doesn't it?