Should Churches Be Tax Exempt?

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Why is your church tax exempt?  Why should it continue to be tax exempt? If I were to sit down and ask you these questions, would you have a clear and coherent answer? I suspect this is something we seldom think about. After all, tax exemption for churches has always been given and we assume, because of its historical longevity, it always will be given.

The fact that most Americans cannot explain why their church is tax exempt indicates a forgotten history and is emblematic of a society that has systematically devalued the church as a beneficial societal institution.

Whenever I litigate a case about church tax exemption or Pulpit Freedom Sunday, the inevitable media comments go something like this: “Churches should pay taxes just like everyone else! They have tons of money, so why can’t they pay their fair share? Why should churches get a free ride? Make them pay!” Comments like these are more prevalent today than any other time I can remember.

Cases involving local governments attempting to tax churches are also becoming more prevalent. For example, Alliance Defending Freedom litigated and won a case against the City of Mission, Kansas, for attempting to impose a “driveway tax” on churches. Or consider the case of Liberty Assembly of God in New Hampshire which was slapped with a property tax bill simply because the local taxing authorities rifled through the church buildings and concluded that because some rooms were “untidy,” the church was not using them for a religious purpose.

So why should churches be tax exempt? There are very sound and valid reasons for church tax exemption. First, there is the “social benefit” theory of tax exemption. This recognizes the fact that churches provide great benefits to society by their good works. Churches minister to the poor and needy in the community, provide numerous social services for the downtrodden among us, and reach out to the “least of these” in thousands of different ways. The social benefit theory justifies tax exemption for churches as a kind of bargain – churches provide needed services, so they are entitled to tax exemption.

One corollary of the “social benefit” theory that is often overlooked is what I have termed the “intangible benefit” theory of tax exemption. This highlights the intangible and often unseen benefits provided by churches to the community. Things like reduced crime rates resulting from transformed lives, suicides prevented when people surrender to Christ, and people with destructive behavioral patterns that harm the community changing into hard-working and virtuous citizens who contribute to the well-being of the community. It is difficult to put a price tag on these types of intangible benefits provided by churches, but there is no question that they exist.

An interesting study conducted a few years ago attempted to put a value on the economic worth of one church. The study estimated that the First Baptist Church of Philadelphia provided over six million dollars of economic value to the community, a figure that is nearly ten times the church’s annual budget.

It is easy to see the benefits provided by churches. In fact, churches provide more social services and intangible benefits to the community than they would ever pay in taxes. It makes no sense to tax churches because the tax dollars taken from the church reduce the amount of benefits it can provide to the community. In a very real sense, taxing churches harms society.

But there is also a constitutional reason why churches are tax exempt. Our history is one of an unbroken practice of exempting churches from taxation. Churches were exempt from the very first time the tax code was passed at the federal level, and have remained exempt in every iteration of the tax code ever since. Every state in America also exempts churches from property taxes. When the U.S. Supreme Court decided a case regarding the property tax exemption of churches, called Walz v. Tax Commission, it stated that providing a tax exemption for churches was a less intrusive option under the Constitution than requiring churches to pay taxes.

That makes sense when you stop and think about it. As the Supreme Court said in a very early case, “The power to tax involves the power to control.”  Taxation is, in essence, a very strong assertion of control by a sovereign over its subjects. Exempting churches is a way to ensure that the state cannot control churches.

Overall, there are very good reasons why churches are tax exempt. We need to remember these reasons and proclaim them to others in a society who reflexively shouts that the Church should pay its fair share. We should take up the cause of passionate defenders of church tax exemption like Kentucky State Representative Whittaker. During the debates on the Kentucky Constitution in 1890, he loudly proclaimed, “Let an untaxed Gospel be preached, in an untaxed church-house, from an untaxed pulpit; let the emblem of a crucified, but risen Christ be administered from an untaxed altar, and, as the spire points heavenward, . . . let it stand forever untaxed.” Amen.

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ADF Senior Legal Counsel - Church Project

Your Church’s Involvement In The 2014 Election

Posted on April 8th, 2014 Churches and Politics | No Comments »

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Every year around this time, questions come up about churches being involved in political elections. Questions like, “Can my church talk about issues that are at stake in the election,” “can my church pass out voter guides,” or “what if a candidate wants to address my congregation?”

Admittedly, it can be confusing for churches and pastors to know what is allowed during an election season.  Much of this confusion stems from the vagueness of the tax code and the accompanying IRS regulations. To help, Alliance Defending Freedom has created many resources for you to utilize this election season.

Guidelines for Churches and Pastors

You’ll find a host of resources on www.speakupmovement.org/church that will clearly spell out what churches and pastors can and cannot do. One popular resource is the Guidelines for “Political Activities” by Churches and Pastors. These guidelines represent the current IRS law regarding what churches and pastors can do during elections. There is a helpful chart included that covers a broad range of topics, such as contributions to candidates and voter education.

Another helpful resource is the Guidelines for Distribution of Voter Guides by Churches. This resource outlines the requirements for distributing voter guides in your church. You will also find a helpful explanation for how to determine what voter guides are appropriate for distribution.

 

These resources should help you make sense of the law and regulations surrounding elections. However, if you still have questions, please contact us directly. Our goal at Alliance Defending Freedom is to ensure that no church is silent during this election season simply because they don’t fully understand what they can do or are intimidated by misinformation.

Pulpit Freedom Sunday

Pulpit Freedom Sunday is all about ensuring that pastors determine what is said from their pulpits, and not the IRS or groups like Americans United for Separation of Church and State. The goal of Pulpit Freedom Sunday is to have the Johnson Amendment declared unconstitutional.  The Johnson Amendment (the last sentence of section 501(c)(3) of the tax code) has proven to be a weapon of censorship and intimidation of churches during election seasons.  In fact, groups like Americans United for Separation of Church and State frequently send letters to pastors trying to intimidate them into silence on the biblical issues surrounding elections. But we believe pastors and church leadership should determine what’s said from the pulpit, not the government or other organizations outside of the church.

On Pulpit Freedom Sunday, October 5, 2014, hundreds of pastors will stand together and preach an election sermon.  The sermon can be as general or as specific as you want it to be.  If you feel led as a pastor to evaluate the candidates in light of Scripture and church teaching, we will defend your constitutional right to do so.  But participation in Pulpit Freedom Sunday does not require supporting or opposing a candidate.  All that is required is a commitment to preach about the election.  Please go to www.pulpitfreedom.org and sign up to join this growing movement of bold pastors. If you are a pastor and you cannot participate on October 5, then pick a Sunday as close to that date as you can, but before the election. You can still sign up to participate and make your voice heard. Pulpit freedom is vital and this project is an important means of ensuring that much of the confusion and intimidation confronting churches during elections is removed.

It is our hope that these resources, and the many others you’ll find on www.speakupmovement.org/church, will help you as a pastor fulfill your biblical calling to “preach the word; be ready in season and out of season; reprove, rebuke, and exhort, with complete patience and teaching.” (2 Tim. 4:2). This calling extends even during election cycles, as biblical Truth does not take a holiday during a political campaign. Now, more than ever, the voice of America’s churches must be heard.

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ADF Senior Legal Counsel - Church Project

Preparing your congregation to face a hostile culture

Posted on April 1st, 2014 Religious Freedom | No Comments »

“I’m sure glad I know you.  I may do something or say something someday where I need you to represent me.  I’m glad I have your number in my phone.  I may be using it one day.”  These words were most recently spoken to me by a friend at a school carnival while my kids were enjoying bounce houses and carnival games.

When I started my career as a religious freedom litigator, I used to occasionally hear statements like this spoken with a smile and a chuckle.  But in recent years, I have heard this more frequently, from audience members who have heard me speak, from family members at gatherings, and from friends at places like the school carnival.  And recently, these statements are not said with a smile and a chuckle.  They are said with a sense of foreboding.

Why is it that Christians have a sense that our faith is under attack and that we are a disfavored minority on the road to sure persecution?  One reason is because of the stories we see of fellow believers who are currently undergoing trials and tribulations for simply exercising their faith.

One recent story is of Barronelle Stutzman, a Washington state florist. Barronelle is the owner of Arlene’s Flowers.  She denied a request from a long-time customer to do the flower arrangements for his same-sex wedding ceremony after such ceremonies became legal in Washington in 2012.  Barronelle explained that the decision she made was very difficult, but that, after discussing it with her husband, it basically boiled down to the fact that she could not do the wedding because of her relationship with Christ.

Barronelle now finds herself facing two separate lawsuits because of her decision to abide by her religious faith and not do the flower arrangements for a same-sex wedding ceremony.  You can read a vivid account of Barronelle’s story here, and watch as Barronelle shares in her own words about this unprecedented attack on her faith in the video below.

Sadly, Barronelle’s story is not the only one.  There are numerous accounts of Christians who are facing legal trials and tribulations simply for abiding by their religious convictions.  Perhaps these accounts demonstrate why Christians today have a real foreboding sense that persecution is coming. They’ve heard the stories and see the possibility in a culture that is increasingly hostile to Christianity.  And they see the cultural disapproval and hostility increasing at a startlingly rapid pace.

Pastor, what are you doing to prepare your congregation to live in a culture that seems bent on denying them the right to live out their faith and to share their faith with others around them?  Are they aware of the increasing attacks on people of faith?  Why not take a moment to show your congregation the video of Barronelle’s story?

Is your congregation also aware of their legal rights?  Take a moment to let them know that Alliance Defending Freedom is here to help.  Barronelle Stutzman is not alone in her fight against the Washington Attorney General and the ACLU.  Alliance Defending Freedom is with her every step of the way to protect her right to live out her faith.  And we will be there to protect others as well, including potentially, those in your congregation.

In today’s culture, Christians need to certainly be aware of the increasing attacks on people of faith.  But they need to also take hope that God has raised up an alliance that stands strong together to defend the faith and the faithful.  Pastor, you are in a unique position to educate your congregation about the attacks that are occurring, and about how Alliance Defending Freedom is here to help.

Let us know if you, your church, or one of your congregation members needs our legal assistance.  You can go to our website at www.alliancedefendingfreedom.org or you can call (800) 835-5233 to have an attorney review the situation.

Together, we can be an alliance defending freedom.

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Join over 70,000 on our Speak Up Church facebook page. You have support!

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IRS Remains Mum on Pulpit Freedom Sunday

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As readers of this blog know, ADF has conducted Pulpit Freedom Sunday since 2008.  Pulpit Freedom Sunday is a legal project designed to restore a pastor’s right to speak freely from the pulpit without fearing government censorship or control.  The government, by applying the Johnson Amendment to churches and pastors, has been mandating that certain content in a pastor’s sermon is off-limits and can result in penalties against the church.  ADF launched Pulpit Freedom Sunday in 2008 to challenge the constitutionality of the Johnson Amendment.  We believe that it is unconstitutional for the government to attempt in any way to censor a pastor’s sermon.

In 2008, Alliance Defending Freedom conducted the first Pulpit Freedom Sunday on September 28. Starting with 33 pastors from 22 states in 2008, Pulpit Freedom Sunday participation has grown steadily to a high of 1621 participants in 2012. These pastors made their sermons public.  They were not preaching secretly or trying to “get away” with something.  Rather, these pastors sincerely want to regain their right to speak freely during their sermons without having to wonder or fear if a government agency is going to punish the church because of something the pastor said from the pulpit.

It has been over six years since Pulpit Freedom Sunday 2008.  Yet the IRS has remained silent.  No pastor has been punished or threatened with punishment by the IRS for participating in Pulpit Freedom Sunday.  I’ve speculated before about the reasons why the IRS has remained silent.  But, in reality, the reasons are unimportant.  What is important is that the IRS has said nothing and done nothing in response to Pulpit Freedom Sunday.

We cannot let up and must continue to march forward to regain a pastor’s right to speak without the presence of the government in the pulpit.  Pulpit Freedom Sunday is coming up on October 5, 2014.  Please, if you are a pastor, sign up to participate this year in Pulpit Freedom Sunday.  And if you are not a pastor, then send every pastor you know a link to our website at www.pulpitfreedom.org.  All the information any pastor needs to become aware of the issues and to sign up to participate is on the website.  We must continue our efforts to get the government out of the pulpits of America.  Will you stand together with us and hundreds of other pastors this October?

Author

ADF Senior Legal Counsel - Church Project

United Nations Group Levels Broadside Attack on the Church

Posted on March 27th, 2014 Religious Freedom | No Comments »

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Opponents to religious freedom are becoming more numerous and much bolder in their assaults. And it’s not just the usual crowd anymore. The Obama Administration, American Civil Liberties Union, Americans United for Separation of Church and State, Planned Parenthood, and others, are going non-stop in their attempts to radically change the world.

One of the more outrageous recent assaults is coming from the United Nations. The Convention on the Rights of the Child is one of the UN organizations opposing religious freedom, the sanctity of life, marriage and family. The Convention uses pressure tactics to browbeat nations into acceptance of radical social changes.

The Convention on the Rights of the Child told the Catholic Church to yield its Biblical beliefs to a worldview that can only be called secular — and the darker things that come with it.

The Convention called for the Church to approve abortion and homosexual behavior. It told the Church to approve of contraceptives – not just adults, but for children!

Ironically, the Convention originally started out in 1994 with a pro-life stance:

“… the child, by reason of his physical and mental immaturity, needs special safeguards and care, including appropriate legal protection, before as well as after birth.”

In the Convention’s 2014 world, preborn children are no longer entitled to “appropriate legal protection.” The committee demanded the Catholic Church change its teaching on family. It accused the Church of “stigmatizing” and contributing to “violence” against the children of homosexual parents.

The Church, among others, has long believed the Convention undermines parents’ rights. And the committee wants to dispel that perception. It is pressuring the Vatican to give up its reservation.

This assault on religious freedom is not occurring in a vacuum. It raises red flags for Protestants and Catholics alike. Though the Catholic Church is under attack now, everyone with Biblical beliefs on marriage, life, and liberty should pay attention. An attack on anyone’s religious liberty is an attack on all.

Erik Stanley, senior legal counsel for Alliance Defending Freedom, said, “These attacks on the Church serve to marginalize the Church simply for standing on Biblical Truth. The church must be allowed to be the church.”

The Vatican is seeking to do just that. It is objecting to the Convention’s “attempt to interfere with Catholic Church teaching.” The Church is confirming its commitment to “the moral and religious values offered by Catholic doctrine.”

Situations like this are increasing in frequency and intensity. And that’s why Alliance Defending Freedom exists. Along with our allies in the U.S. and overseas, we are protecting everyone’s right to speak free, pray free, and live free. The United Nations must respect religious freedom and allow the Church to be the Church. Only then, will children and people of faith truly be free.

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