If Pastors Want to Play Politics, Churches Should Pay Taxes

Mark Kauzlarich


By Ciro Scotti
May 9, 2017


Like so much that is served up in the White House mess, the Executive Order on religious liberty signed by the President last week is all sizzle and no ribeye.

Its purported purpose was to allow churches and pastors to endorse political candidates from the pulpit without worrying about the IRS threatening their tax-exempt status. But the order was so wimpy that, as The New York Times said, it angered many Trump supporters and perplexed innocent religious bystanders, while opponents just said: “meh!”

Related: Trump Vows to End Prohibition on Church Political Activity

Religious conservatives looking for the “liberty” not to hire or serve members of the LBGTQ community went away disappointed. Brian Brown of the National Organization for Marriage, which opposes same-sex marriage, told The Times, “In failing to deliver for people of faith, President Trump risks alienating the single constituency most responsible for his election.”

Clerical organizations like the 45,000-church National Association of Evangelicals shook their heads: Its president, Leith Anderson, said, “I don’t actually know anybody who has endorsed or who wants to endorse a politician from the pulpit.”

And the American Civil Liberties Union was so not threatened that it declined to sue over what it called “an elaborate photo op” on National Prayer Day.

The atheists did file suit, arguing that the EO gives religious nonprofits rights not afforded to other groups that are tax-exempt. In a statement, the Freedom from Religion Foundation said in part, “Trump’s order and statements signal to the Internal Revenue Service that it should not enforce the electioneering restrictions of the tax code against churches and religious organizations while permitting these restrictions to be enforced against secular nonprofits.”

Those restrictions were set in 1954 by Johnson Amendment, which encourages the IRS to threaten the tax-exempt status of houses of worship that endorse a political candidate or party. But it has rarely been invoked.

Related: Trump's Religious Freedom Order May Give Opponents an Unintended Boost

Now the IRS, always wary of the amendment, will have even less of an incentive to call out a church for playing politics.

And that’s O.K.

If priests, rabbis, imans, pastors, nuns, monks and their religious institutions want to use their use their bully pulpits to bully congregants into voting a certain way, they should be free to do so. After all, no one is forcing folks to sit on a hard bench and listen to them.

However, like every other tax-paying American, those with God on their side should pay to play politics. Liberty isn’t a free lunch.

Of course, it is a pipe dream to imagine that deity-hugging politicians might ever remove the tax exemption granted to religious entities: In many parts of the country, that would be tantamount to burning the flag on the Fourth of July or kicking a three-legged puppy.

But there was a reason that tax exemptions for religious groups were blessed by the Founders. In the 1970 case Walz v. Tax Commission of the City of New York, the U.S. Supreme Court, citing the Establishment Clause of the First Amendment, upheld the tax exemptions because it said they reinforced the desired separation of church and state.

In the majority opinion, Chief Justice Warren Burger wrote: ‘‘[W]e will not tolerate either governmentally established religion or governmental interference with religion.’’

What about religious interference with the government?

Once religions become full-metal-jacket political combatants, it is they who cross the line between God and Caesar.

Related: If Trump's Tax Plan Passes, Here Are the Deductions and Breaks You Could Lose

At a signing in the Rose Garden, Trump said, “We are giving churches their voices back.”

Fine. Now pay for the megaphone.

Either tax all religious organizations, period. Or tax those that want a full-throated engagement in the political process by endorsing candidates and parties, setting up political-action committees and shuttling the faithful to the polls. And let those that want to retain their exemptions opt out.

By not taxing religious institutions, the government is in effect subsidizing them. A 2012 study figured that federal subsidies amounted to about $71 billion – or $75 billion in current dollars.

That would cover about one-third of the interest payments on the national debt.


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President Trump Signs the Executive Order on Promoting Free Speech and Religious Liberty

Trump Is Expected to Relax Tax Rules on Churches Taking Part in Politics

By MICHAEL D. SHEAR, LAURIE GOODSTEIN and MAGGIE HABERMAN

 MAY 3, 2017



President Trump speaking at the National Prayer Breakfast in Washington in February. Credit Stephen Crowley/The New York Times

WASHINGTON — President Trump plans to mark National Day of Prayer on Thursday by issuing an executive order that makes it easier for churches and other religious groups to actively participate in politics without risking their tax-exempt status, several administration officials said.

Taking action as he hosts conservative religious leaders Thursday morning, Mr. Trump’s executive order would attempt to overcome a provision in the federal tax code that prohibits religious organizations like churches from directly opposing or supporting political candidates.

The move is likely to be hailed by some faith leaders, who have long complained that the law stifles their freedom of expression. But the order falls short of a more sweeping effort to protect religious liberties that has been pushed by conservative religious leaders since Mr. Trump’s election.

Many clergy members say they do not want to endorse political candidates from the pulpit because it could split their congregations and distract from their religious messages. This appears to be the case even among evangelicals, although it is Mr. Trump’s conservative evangelical advisers who encouraged him to address the issue.

It was unclear Wednesday whether Mr. Trump also planned to issue a separate order that would exempt some religious organizations like churches from Obama-era regulations requiring protections for gay men, lesbians and others.

A coalition of evangelicals, Roman Catholics, Mormons and Orthodox Jews has been eagerly awaiting a so-called religious liberty order, which they also hope will exempt religious entities from providing their employees with coverage for contraception in their health care plans.

A closer look at the Johnson Amendment

Heather Greene — March 12, 2017 




WASHINGTON – On Feb. 2, President Donald Trump returned for a brief moment to a recurring issue facing his administration: the Johnson Amendment. At the National Prayer Breakfast, he told the attendees,“Among those freedoms is the right to worship according to our own beliefs. That is why I will get rid of, and totally destroy, the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution. I will do that — remember.”




[Public domain.]Repealing the Johnson Amendment has been one of the main focuses of Trump’s campaign, and it continues to find its way into current political discourse with regard to religious freedom. Trump began speaking out against the tax code early in his bid for the presidency. Then, during his acceptance speech at the 2016 Republican National Convention, he said:




At this moment, I would like to thank the evangelical and religious community in general who have been so good to me and so supportive.You have much to contribute to our politics, yet our laws prevent you from speaking your minds from your own pulpits. An amendment, pushed by Lyndon Johnson many years ago, threatens religious institutions with a loss of their tax-exempt status if they openly advocate their political views. I am going to work very hard to repeal that language and protect free speech for all Americans.

What is this Johnson Amendment, and what is its relationship to religious freedom? How does it affect the greater Pagan, Heathen, and polytheist communities in the U.S.?
History of the Johnson Amendment

The now-famous tax code change was implemented in 1954, after being passed by a Republican congress and signed into law by President Dwight D. Eisenhower. It’s name is taken from Lyndon B. Johnson who, at the time, was a senator from Texas. As the story goes, in 1954, Johnson was running for reelection against 30-year-old Dudley Dougherty. While Johnson had only won the previous election in 1948 by 87 votes, he was reportedly expected to easily to beat Dougherty in the primary race.

However, during the campaign process, Johnson vocally opposed the ongoing McCarthy trials and its related fear-mongering. Contrary to that, Dougherty was running on platform that supported the trials and the government’s aggressive attempts to stop the spread of communism in the U.S.

During the campaign, several large nonprofit organizations stepped in to back Dougherty, including Fact Forum and the Committee for Constitutional Government. These wealthy secular groups avidly supported the government’s anti-communist efforts and, as result, they publicly engaged in electioneering on behalf of Dougherty.

501c3 Facts

Most churches in America have organized as "501c3 tax-exempt religious organizations." This is a fairly recent trend that has only been going on for about fifty years. Churches were only added to section 501c3 of the tax code in 1954. We can thank Sen. Lyndon B. Johnson for that. Johnson was no ally of the church. As part of his political agenda, Johnson had it in mind to silence the church and eliminate the significant influence the church had always had on shaping "public policy."

Although Johnson proffered this as a "favor" to churches, the favor also came with strings attached (more like shackles). One need not look far to see the devastating effects 501c3 acceptance has had to the church, and the consequent restrictions placed upon any 501c3 church. 501c3 churches are prohibited from addressing, in any tangible way, the vital issues of the day.

For a 501c3 church to openly speak out, or organize in opposition to, anything that the government declares "legal," even if it is immoral (e.g. abortion, homosexuality, etc.), that church will jeopardize its tax exempt status. The 501c3 has had a "chilling effect" upon the free speech rights of the church. LBJ was a shrewd and cunning politician who seemed to well-appreciate how easily many of the clergy would sell out.

Did the church ever need to seek permission from the government to be exempt from taxes? Were churches prior to 1954 taxable? No, churches have never been taxable. To be taxable a church would first need to be under the jurisdiction, and therefore under the taxing authority, of the government. The First Amendment clearly places the church outside the jurisdiction of the civil government: "Congress shall make NO LAW respecting an establishment of religion, nor prohibiting the free exercise thereof."

Religion cannot be free if you have to pay the government, through taxation, to exercise it. Since churches aren't taxable in the first place, why do so many of them go to the IRS and seek permission to be tax-exempt? It occurs out of:

• Ignorance ("We didn't know any better")
• Bandwagon logic ("Everyone else is doing it")
• Professional advice (many attorneys and CPAs recommend it)

Does the law require, or even encourage, a church to organize as a 501c3? To answer that question let's turn to what the IRS itself has to say.

Churches Need Not Apply

In order to be considered for tax-exempt status by the IRS an organization must fill out and submit IRS Form 1023 and 1024. However, note what the IRS says regarding churches and church ministries, in Publication 557:Some organizations are not required to file Form 1023. These include: Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men’s or women’s organization, religious school, mission society, or youth group. These organizations are exempt automatically if they meet the requirements of section 501(c)(3).

Churches Are “Automatically Tax-Exempt”

According to IRS Code § 508(c)(1)(A):Special rules with respect to section 501(c)(3) organizations. (a) New organizations must notify secretary that they are applying for recognition of section 501(c)(3) status. (c) Exceptions. (1) Mandatory exceptions. Subsections (a) and (b) shall not apply to— (A) churches, their integrated auxiliaries, and conventions or associations of churches.

This is referred to as the "mandatory exception" rule. Thus, we see from the IRS’ own publications, and the tax code, that it is completely unnecessary for any church to apply for tax-exempt status. In the IRS’ own words a church “is automatically tax-exempt.”

Churches Are “Automatically Tax-Deductible”

And what about tax-deductibility? Doesn’t a church still need to become a 501c3 so that contributions to it can be taken as a tax deduction? The answer is no! According to IRS Publication 526:Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization, most organizations other than churches and governments, as described below, must apply to the IRS.

In the IRS’ own words a church “is automatically tax-deductible.”

Churches Have a Mandatory Exception To Filing Tax Returns

Not only is it completely unnecessary for any church to seek 501c3 status, to do so becomes a grant of jurisdiction to the IRS by any church that obtains that State favor. In the words of Steve Nestor, IRS Sr. Revenue Officer (ret.):"I am not the only IRS employee who’s wondered why churches go to the government and seek permission to be exempted from a tax they didn’t owe to begin with, and to seek a tax deductible status that they’ve always had anyway. Many of us have marveled at how church leaders want to be regulated and controlled by an agency of government that most Americans have prayed would just get out of their lives. Churches are in an amazingly unique position, but they don’t seem to know or appreciate the implications of what it would mean to be free of government control."

from the Forward of In Caesar's Grip, by Peter Kershaw

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