The religious tax exemption boondoggle

The Family Research Council is a think tank that promotes right-wing causes that are consistent with a christian nationalist viewpoint. the investigative journalism outfit ProPublicareveals that it, along with other right-wing groups, has claimed to be a church to escape from paying its full share of taxes.

Forty members of Congress on Monday asked the IRS and the Treasury to investigate what the lawmakers termed an “alarming pattern” of right-wing advocacy groups registering with the tax agency as churches, a move that allows the organizations to shield themselves from some financial reporting requirements and makes it easier to avoid audits.

“FRC is one example of an alarming pattern in the last decade — right-wing advocacy groups self-identifying as ‘churches’ and applying for and receiving church status,” the representatives wrote, noting the organization’s policy work supporting the overturning of Roe v. Wade and its advocacy for legislation seeking to ban gender-affirming surgery.

The FRC sought and received reclassification from a standard tax-exempt charity to an “association of churches” in 2020.

In its application for church status, the organization said it met 11 of the 14 characteristics that the IRS uses to determine whether an organization is a church, including an established place of worship — a chapel in the organization’s Washington office building, at which it said it holds services attended by more than 65 people. (Someone who answered the phone at the office said the group doesn’t offer church services.) The organization said its association comprises nearly 40,000 “partner churches” that must affirm a statement of faith to join; it did not offer the names of those partners on its form to the IRS or provide them to ProPublica.

I have long argued against the provision in the US tax code that enables religious organizations and charities to claim exemption from taxes. This leads to all manner of abuses that have been well-documented, with so-called preachers living in high style in mansions and private jets. Trying to distinguish genuine charities from phony ones is not easy and gets the IRS tangled up in all manner of time-consuming and expensive legal battles. Eliminating that tax exempt category would make things so much simpler.

I know people who only donate to organizations that are officially charities so that they can get a tax deduction for their contribution. My feeling is that one should donate to organizations because one thinks that they are worth supporting. It should not matter if one gets a tax-deduction or not.

It is true that removing the tax exemption for charitable organizations would cause some hardship, at least in the short run, to some worthy charities because it would effectively reduce their revenues. But in the long run they would reach a new equilibrium.


  1. txpiper says

    “I have long argued against the provision in the US tax code that enables religious organizations and charities to claim exemption from taxes.”
    I expect that with religious organizations, the issue will always be the “free exercise thereof” clause, rather than the tax code.

  2. consciousness razor says

    Tax all the churches, and look at that deficit go down. I’m sure txpiper would love it. As long as people (besides him) and other private entities have less money, because the federal government so desperately needs the private sector to give it the dollars that only the federal government creates, that’s got to be a great sign for the economy, no?


    Unlike trying to define a “church” or “religion” (and make that work under the Constitution), it’s not that hard to specify what ought to be required of a “charity” in order to receive government support. They shouldn’t in any way exclude their (tangible, and not fake or illusory) benefits from those who are non-members/non-believers or what have you, since they benefits have to be for the community as a whole, making them essentially secular. If they’re not meeting that kind of standard, then the whole community doesn’t have any interest in supporting them via tax exemptions. It’s not that complicated.

    Now, wouldn’t it be better if the government did that sort of stuff, such that it wasn’t based on voluntary donations (which go down when times are hardest and such benefits are needed the most) from these typically awful decision-makers who think that they know which people “deserve” their donations and which people don’t? At least for the most part, that is probably right. However, there may be a lot of cases when we just shouldn’t have the government involved, so this kind of market-based thinking, like just expecting them to “reach a new equilibrium” (based on merit or corporate mergers or however you think that might go), is not exactly a satisfying answer to the problem.

    Anyway, the point is that you could pretty easily remove the exemptions for churches without affecting genuine charities. Basically cut out the bits that depend on whether or not something is “religious,” and that would settle it…. There would still be some cheaters and frauds, of course, but there are enforcement mechanisms already. So we can just leave it as a completely separate conversation to ask whether or not we should ramp those up somehow. (Once churches are no longer in the mix, you might actually be pretty satisfied as it is.)

  3. lanir says

    So… I’ve been in agreement with this take on churches and taxes for some time now. That means it’s worth double checking once in awhile to avoid confirmation bias.

    So if we taxed churches… it would raise government income. I don’t think it would meaningfully impact any charitable activities of the church. Those are just PR anyway, same as they are for any rich person or organization. The real money is going elsewhere. Where? No idea… But the government would find out. And if their books aren’t completely opaque, then they would have a much harder time hiding pedophiles. If they can’t hide them, they won’t try and that means they’d finally in some small way live up to the morals they preach for everyone else. Speaking of morals, they could talk about politics without being liars (churches are not allowed to promote specific political candidates, if they want to they’re supposed to pay taxes like everyone else).

    If we don’t tax churches.. status quo. Hidden pedophiles, immoral preachers keep telling their congregations who to vote for, money the church takes in does the most amazing disappearing act, and generally things go on as before.

    … Ok, I still agree with this. Confirmation bias doesn’t seem to be an issue. Not sure about charities though. Hadn’t thought of it before so I’ll need time to toss the idea around.

  4. says

    There is a form you can submit to the IRS documenting that a church is playing politics. And if the IRS gets a settlement from a church, the whistleblower may get a payment!

    The only problem is that the Trump admin demolished the IRS and they are backlogged by literally millions of items and have some small number of examiners working on it.

  5. Holms says

    I have long argued against the provision in the US tax code that enables religious organizations and charities to claim exemption from taxes.

    I believe this to be the wrong approach. Currently in USA as I understand it, a (non-church) charitable organisation qualifies for tax exemption only by maintaining expense-tracking paperwork to prove their expenditures are mostly for charitable purposes; a church qualifies for tax exemption purely on the basis of it being a church. I believe the correct approach is to go after that automatic qualification enjoyed by churches; they can still qualify for tax exemption by proving their charitable work by the same method that other organisations must go through.

  6. John Morales says

    Of course, a tax exemption could be changed to a tax refund.

    First, pay the tax. Then, prove you merit having it returned.

    Right now, the converse applies.

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