On November 21st
of this year, oral arguments were held in the District Court for the Eastern
District of Kentucky- Covington on a case where Atheists challenged the
constitutionality of IRS exemptions for religious organizations and argue that
all religious organizations and churches should be expected to meet the same
financial requirements as secular nonprofit organizations.
This particular case
deals with the IRS Form 990, which is an annual report statement that must be
filed and provides information on the organization’s programs and finances.
Currently churches and religious organizations are being exempted from filing
this form because their annual revenues are under a specific amount. Atheists
continue arguing that religious organizations and churches are receiving
preferential treatment “because they do not have to withhold income tax from
compensation to clergy, reveal staff salaries, or disclose the names of donors
who give more than $5,000” (Winston, Religious News). This also suggests that
since there is no filing of Form 990, there is no way of actually keeping track
on whether these organizations actually benefit the public or have contributed
to their communities.
As
it turns out this is not the only exemption that is in full effect today. There
is also a clergy tax-free housing exemption that benefits many ministers,
rabbis, etc. and this gives them a 5-10% cut on their take-home pay, in other
words this allows any clergy to shield part of their salary from federal income
taxes. For example,
“Churches routinely designate a portion of a pastor’s salary
as a housing allowance. So, a minister that earns an average of $50,000 may receive
another third of income, or $16,000, as a tax-free housing allowance,
essentially earning $66,000. Having to pay taxes on the additional $16,000
($4,000 in this case) would mean a 6 percent cut in salary” (Bailey, Religious
News).
In Wisconsin, this has been clergy tax
allowance was challenged and a District Court judge ruled that this exemption violates
the Establishment Clause because it only benefits religious people and
therefore is unconstitutional.
I couldn’t help
but look at both these exemptions and see that there is no such thing as
separation of church and state. I think that religious organizations and
churches should meet the same requirements as secular non-profits including
reporting their finances by filing Form 990 and states should not offer a
clergy housing allowance. I think that everyone should comply with the federal
law and there should be no preferential treatment towards any religion. As
explained in the court opinion in Employment
Division v. Smith, Justice Scalia argued that religious beliefs should not
be an excuse from complying with the law that is conducted and regulated by the
government. And in this particular case, I think that if these exemptions
continue there could be a slippery slope. Think about it, any nonprofit
organization could claim to be religious affiliated and would not be required
to file Form 990. It just seems as though there is no secure process of
checking on these religious organizations and churches to see if they are in
fact following their goals or helping the public and greater community. I also
think that having these exemptions entails that there is entanglement between
church and state. There is no clear separation and that is perceived as the federal
government aiding the religious. Although, I believe that all religions have
the same capability and opportunity to obtain these benefits, the state prefers
religion to non-religion. And the only way to maintain neutral would be to have
religious organizations and churches comply with the law and properly file Form
990.
I also believe that
clergy housing allowances should not be given. From what I understand, these
allowances first originated when clergy were actually residing in “church-owed
parsonages.” Today not many clergy reside in their facilities and having this
allowance becomes somewhat useless because there is no way of tracking whether the
clergy is using the money towards their churches or facilities. In Walz v. Tax Commission of City of New York,
Walz sued the state of New York for aiding religious groups with an exemption from
taxes on property and argued and this kind of exemption provides a financial
benefit only to the religious and therefore violates the Establishment Clause.
The Court in this case ruled that the exemption was intended to avoid
interference with religious beliefs and practices. But the exemption alone is
in fact interference because it is a financial benefit that only religious
organizations, churches and clergy are able to enjoy and therefore disregards
the nonreligious.
Do you agree or should these exemptions continue to be used?
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