Saturday, December 8, 2007
My co-editor, DAB, has been reporting recently on Senator Grassley's inquiries into the financials of "mega-churches." That isssue, of course, is not unique to houses of worship as all 501(c)(3)'s (not just houses of worship) must avoid private inurement and excess benefit transactions. Mitt Romney's recent speech regarding his religious faith and the role it ought to play in his quest for the presidency raises a more specific issued related to houses of worship: whether and how to draw an impermeable line between tax exempt religion and politics. These are among the great imponderables of tax exemption law and many scholars have tried, in vain I think, to resolve the issue. A search of "churches and politics" will produce 100's of articles. A very recent one by Mark Totten, The Politics of Faith: Rethinking the Prohibition on Political Campaign Intervention, 18 Stan. L. & Pol'y Rev 298 (2007) contains the following introduction:
Recent attention to the role of religion in electoral politics has kindled new interest in what a church can say and do during an election season. Under federal tax law, churches and other charitable organizations receiving favorable tax treatment under section 501(c)(3) cannot "participate in, or intervene in ... any political campaign." The Internal Revenue Service (IRS) and the courts have interpreted this ban as both broad and absolute. It reaches not only the use of funds - an important means of regulating campaign finance - but also what a religious leader might say from the pulpit. Interpreting the general rule, the IRS draws a distinction between acceptable issue advocacy and unacceptable campaign intervention judged by a "facts and circumstances" test that encourages silence on the most pressing issues of the day. Moreover, for the first time ever, the IRS has launched an organized effort to enforce this prohibition, especially against churches. In February 2006 the IRS issued its [*299] final report on a pilot enforcement program, the Political Activities Compliance Initiative (PACI). Of the 110 organizations investigated, 43% were churches. The IRS expanded the program for the 2006 mid-term elections, toward the end of providing a rapid, targeted response to alleged violations. In practice, this broad and absolute prohibition, together with the government's new effort to enforce it, places an unacceptable restraint on faith.
I wonder what implications for tax exemption and politics are contained or provoked by Romney's speech. I'll have to think about it and revisit the issue later this week. In the meantime, comments and ideas would be appreciated.