The Law is The Law!

On November 21^st 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?