New Challenge to Politics Ban for Tax Exempt Entities – How will it affect the Church?

I saw the following story yesterday while reading the news: 33 Pastors Flout Tax Law with Political Sermons. Anyone who has spent long enough in the Bloggernacle, with the constant hand-wringing in some quarters over the Church losing its tax exemption due to interference in political issues such as Prop 8, is familiar with the basics. Section 501(c)(3) organizations, which are tax-exempt under federal law, may not participate in partisan political campaigns or risk losing their exempt status. What the above story reports is the next step in potentially eliminating this limitation.

This is a storm that has been brewing for some time in my mind. Religion and partisan politics have become increasingly intertwined in the last 20 or so years. (Duh) This years Republican primary process included one candidate who was a former pastor and did not seem to have completely left his old career behind him. The IRS has occasionally jumped on a church here or there for excessively politicizing its services (see the All Saints case from a couple of years ago for a particularly weak case that the IRS picked up), but to my knowledge such things are rare. But both pastors and politicians want to push this thing further. Hence, the above move to create a test case that would hopefully render the politics ban for tax-exempt institutions void by judicial order.

One can of course debate the merits of the politics ban. On one side, it is certainly an infringement of free speech- for many people, their religious beliefs both lead to certain positions on public issues, but also compel them to speak publicly about them. When individual members of a church do so, its OK, but when someone stands at a pulpit and does it, the IRS finds that unacceptable. On the other side, the politics ban insures that we are not giving a tax subsidy to organizations whose purposes are primarily partisan and political (501(c)(3) organizations include a wide variety of institutions). I can say that I have personally been grateful for the tax-exempt regulations on more than one occasion during my attendance at Church meetings.

Which brings me to the point that I really wanted to make here- if the politics ban on tax exempt entities disappears in a couple of months, what happens with the Church? Will it abandon its policy (pretense) of political neutrality or does it not depend on the threat of losing the tax exemption? Is there a doctrinal foundation for political neutrality standing apart from the preservation of the Church’s tax exemption and if so, what is it?

As a final note, as someone who has studied the tax exempt issue in some depth, I do not buy into the arguments that the Church’s tax exemption is already at risk due to its participation in campaigns such as Prop 8. So lets steer comments away from that and towards addressing the questions I asked above.

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3 thoughts on “New Challenge to Politics Ban for Tax Exempt Entities – How will it affect the Church?

  1. I am confused about the details of this. You state that the tax exempt churches “may not participate in partisan political campaigns.” I recently read the letter from the 1st Pres. saying that they won’t endorse a party or a candidate, but they will speak out on social issues.The church has recently spoken out on Prop. 8 as well as on immigration issues.How are they coming close to risking their they tax exemption?As for the doctrinal basis for political neutrality, it is not doctrine to be neutral. In fact, if there was a party that was completely in line with what God wants, the church would probably fully endorse that. However, there is no party in the US (or other country) that is fully inline with what God wants…..or candidate either. So until then, they tell us to do our best to look at the issues and candidates and vote.

  2. Anonymous,In order for the Church to be risking its tax exemption, it would have to be spending a substantive portion of its budget fighting Prop. 8. The political ban is one of endorsing specific people for political office (although likely saying, “Vote for the Democrat” would also get you in hot water), not one of staying out of the political arena. AHLDuke,I suspect that there will be no change to the institutional Church if the prohibition on endorsing a candidate were terminated. On the ground level, I can imagine a random bishop here or there getting comfortable endorsing a candidate, but I would be shocked if that didn’t happen somewhere already (although I have never seen it happen). Largely, I don’t think the Church cares if McCain or Obama is president, even if, among members in the U.S., those of us who want Obama are probably in a distinct minority.

  3. Is there a doctrinal foundation for political neutrality standing apart from the preservation of the Church’s tax exemption and if so, what is it?I don’t know that there’s a doctrinal foundation for political neutrality, unless you count D&C 134:9 ("We do not believe it just to mingle religious influence with civil government")–but that scripture seems more like a statement of policy than doctrine.Will it abandon its policy (pretense) of political neutrality or does it not depend on the threat of losing the tax exemption?The First Presidency letter that was read in Church last Sunday makes me think that the policy of political neutrality has a lot to do with maintaining tax exempt status. According to the letter, the Church’s political neutrality extends only so far as “political parties, platforms, and candidates” are concerned. The scope of the policy, so described, lines up pretty closely with Sec. 501(c)(3) requirements.Further, rather than repeat the “We only speak out on moral issues” mantra, the letter concluded by “affirm[ing the Church’s] constitutional right of expression on political and social issues” (emphasis added). I never thought the moral/political dichotomy was particularly persuasive, since virtually any political issue can be painted in moral terms. However, at least that position provided some kind of philosophical justification for the Church’s occasional political activism. In this letter, the Church expressly and unapologetically claimed the right to speak out on “political . . . issues.” That line really stood out to me–it seems to suggest that the Church is becoming less hesitant to speak out on explicitly political issues.Therefore, my impression is that the Church’s policy of political neutrality largely has to with 501(c)(3) restrictions. Were those removed, I’m afraid that we might see more forays into the political sphere.

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