The Importance of Being Tax-Exempt

The Westboro Church has brought up the question yet again whether or not churches and other religious institutions should be taxed or not. The problem is that some churches use their power for political gain, which is sort of forbidden under the tax code. Therefore, a quick discussion may help.

The exemption is based on a simple concept: The government can't save everyone from everything. When someone falls on hard time, the government is not the best person to go to. It can take a while to get a response, and sometimes that response is simply not good enough for the person in the crisis; too many government have gotten extremely worried about following the rules, and that can make for some slow response times. Throw in the ability of some to game the system, and what should be a simple problem often blows up.

A private agency, however, can act as quick or as slowly as it wishes; it makes its own rules. From a government perspective, that speed and not requiring rules can be a lifesaver, as well as a help when it comes to budgeting; if they know that a private agency can take up the slack in emergencies, it gives them some wiggle room for other issues. Because of that they are more than willing to work in some perk for agencies that are willing to work specifically to help people in need, be it helping to overcome addictions to putting their hat in the ring when emergencies strike, and the specific perk is that they can apply for tax-exempt status.

Although there are those that have advocated for taking away the church's tax-exempt status, usually citing the billions of dollars in revenue it would generate, there are some obvious issues. The revenue alone is an obvious pipe dream; due to rules regarding charitable deductions most churches would likely pay as much in taxes as they are now. Worse, churches would be able to take advantage of numerous government grants that are beyond them now; in effect, atheists would be subsidizing places of worship. By providing a tax-exempt status for churches it can actually keep them out of the usual political loops.

However, there are some checks and balances written into the system. Predominant among those is that the not-for-profit cannot be political. There is some allowance for the freedom of speech, but in general they cannot take a political position, be it advocating for a particular law or even suggesting voters vote for a particular candidate or group of candidates. There are ways of skirting this, as the Latter Day Saints have shown with their advocacy of California's Proposition 8 and the Westboro Church's picketing of various funerals. The worst are those that give out voting guides; because of the very careful wording of the guides they have yet to be really investigated. Even a Catholic bishop skirted the law when he suggested that voting for Obama was a mortal sin.

Unfortunately, there is little the IRS can do. It takes a high-ranking official in order to even initiate an investigation, and even then a major violation must have taken place. It also needs to be on ongoing concern; the aforementioned bishop isn't enough as it was a one-time event. Most churches and temples have usually respected the the distance between church and state, but some have skirted the law, and those groups need to have their status revoked. Unfortunately there is little that can be done directly against them.

However, when it comes to indirect dealings, there are a number of solutions. A church that decides to dabble in politics can be ostracized in the community, with businesses doing less and less business with known members of the church. A church that pickets funerals and other events can be picketed against. Social media can also be brought to bear, especially if there are known leaders in the church; a picture posted infinite times with a "do not do business with" tag can be very effective. Even just having people wear "IRS Church Observer" shirts can work, as long as the "IRS" is spelled out to be something other than "Internal Revenue Service". Eventually the church will get the hint, or be unable to afford its bills. In essence by hitting the church in its pockets, a lot of damage can be done.

In short, just because the church has protections does not mean those protections should be everlasting. Temporal protections should be just temporary compared to eternal things, after all.