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January 2, 2013


Replies: 180

Religious 501(c)3 discrimination. (Or, the IRS doesn't do its job for Churches)

tehbigd Featured By Owner Jan 2, 2013
I should start off by talking about nonprofit organizations, which are all 501(c)'s of one sort of another. [link]
Wikipedia has a list with short explanations, I suggest a quick once-over, specifically looking at 501(c)3, and 501(c)4.

Basically, a 501(c)3 organization is given tax-exempt status, and its donors get to write off donations to it; but the organization cannot endorse candidates or lobby.
Religious organizations fall under the 501(c)3 code, as well as charities like the Red Cross, St. Judes, Toys for Tots, etc. This is all fine and good, many of them do very good work for their causes and communities. In fact, this is what the 501(c)3 tax code was created for, to encourage people to give money to charitable efforts to help everyone. They are allowed to advocate for issues, but directly supporting a candidate, or lobbying is verboten. A 501(c)3 organization could say that abortion was wrong, but it couldn't say "Obama wants to abort your babies." It can also advocate for cancer solutions, but it cannot claim that "Romney's policies would stagnate cancer research."

A 501(c)4 organization is given tax-exempt status, and can endorse candidates and lobby, as long as it's for social welfare; but donors cannot write off donations to it. A
501(c)4 is almost the same thing as a (c)3, but with political contributions involved. It dropped the tax-exemption for donors, because the people writing the tax code, showing infinite wisdom, decided that political donations should not be tax deductible (consequentially, this is the tax-exempt group that has ballooned since Citizen's United). All those new PACs are 501(c)4's, if you want a better picture of what that entails.

The sad thing is? I don't know about you, but I heard any number of preachers using their pulpits to say: VOTE FOR ROMNEY/OBAMA. This is illegal, and every single one of them should have lost their non-profit status for it. But none of them did.

Apparently, the IRS has changed its policy, and is not auditing 501(c)3 churches that endorse politicians, even though there are a record number of complaints. This creates a loophole for political speech, which lets candidates with churches behind them circumvent taxes by laundering money through 501(c)3 organizations. The funny thing? Just switching churches to 501(c)3 to 501(c)4 organizations would be enough for them to operate within the spirit, as well as letter of the law, without immediately hurting the churches bottom line.

So why isn't anything being done?
Well, I'd like to throw out any number of hypothesises (hypothesie? hypothesii? SCREW IT, GUESSES).
1: Nobody wants to deal with the fallout for doing the right thing. This, I think, is the biggest problem. Nobody wants to be seen as the guy who said, "fuck it, I'm gonna tax churches!", even though a change from c3 to c4 would not actually tax churches. Many of them already have a very acute persecution complex, feeding into it in any way could be a death sentence for re-election (see: war on Christmas).
2: Bush. Well, I don't think he's why nothing is being done, I think he was one of the big causes behind the whole problem. By appointing partisan judges, he tilted as much of what was supposed to be a non-partisan-meritocracy as he could into a partisan-shill-fest (one need only remember the whole Meyer's appointment fiasco to get my point).
3: What happens when the IRS inevitably takes these cases into hostile conservative courts? The way the IRS sees it, any case that comes into the courts will inevitably cut the IRS's power to collect revenue. Being a bunch of bean-counters, they figure that the entire situation is no good for them right now.

Questions? Opinions? Barely concealed gestures of contempt?

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Devious Comments

TheRedSnifit Featured By Owner Jan 6, 2013
I suspect that it's because the IRS doesn't want to spend a ton of money extracting a tiny amount of money from church donors. I'm pretty certain that the IRS makes this same choice when faced with similar non-church scenarios.
tehbigd Featured By Owner Jan 7, 2013
It never really was about revenue when it came to this issue, it was about keeping charities from turning into political machines that people can donate to and not pay taxes for.
LacieMelhart Featured By Owner Jan 6, 2013  Professional Photographer
I could never understand why churches are tax exempt.
Novuso Featured By Owner Jan 3, 2013
The Preacher could be speaking for himself thus this would fall under the protection of the first amendment. Pretty much case closed right there.

If you want to complain about tax exempt status complain about the large billionaire funded foundations.

Ford Foundation
Rockefeller Foundation
Carnegie Foundation
Bill and Melinda Gates Foundation
Buffet Foundation

Pretty much every billionaire has one, why is that? It is because these are not charities they are tax havens to protect their estates. These foundations are frauds they use to dodge income tax and estate tax. Billionaires can't pass their estates onto their children so they create a tax exempt foundation and then give the proprietorship of the foundation to their children. That is how it works. This has been going on for 100 years since the income tax started in 1913. This loophole was in the tax code from day 1. When income tax started suddenly JD Rockefeller and other robber barons became poor men because they gave all their money way to "charity" so they didn't have to pay any tax. How convenient.

~tehbigd, you have your priorities so out of whack here. Stop worrying about the five bucks some old lady puts in the tithe tray and worry about what the billionaire class is doing in robbing the country blind with their frauds.

Warren Buffett once admitted "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." He wants to raise taxes because he doesn't have to pay the taxes himself. They got us all fooled but that is about to change because people are starting to wake up and you would be wise to wake up too.
tehbigd Featured By Owner Jan 4, 2013
My priorities are to end preferential treatment for religious bodies under the tax code. If you do not think that is an important issue, that's fine, but it is one that is rarely discussed. Class warfare, on the other hand, is an issue that sees plenty of of air-time.
maddmatt Featured By Owner Jan 3, 2013
I have family that has worked in educational technology under grants from Bill and Melinda Gates as well as Michael Dell's foundation. Tax shelter or not, they are doing some amazing things in this country and others where government simply is too inefficient.
Novuso Featured By Owner Jan 3, 2013
What they give out in grants is a pittance compared to what they keep for themselves. These foundations get bigger every year because they give out less than what they earn in interest. Either way all of it should be taxed.
maddmatt Featured By Owner Jan 3, 2013
Can you give me some amounts that show the foundation is just a sham?
Zer05um Featured By Owner Jan 3, 2013  Professional General Artist
I'm in favour of taxing churches, temples etc as luxuries.
maddmatt Featured By Owner Jan 3, 2013
Most of them make zero profit. So you would be taxing nothing.
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