Friday, February 8, 2013
The IRS Form 990 is a twelve-page document that requires most federally tax-exempt organizations to disclose their mission, programs, and financial information. If an organization required to complete a Form 990 fails to do so, the organization is at risk of losing their tax-exempt status.
Additionally, the list of organizations required to complete the form includes all private 501(c)(3) organizations. Recently, many nonprofit organizations have lost their tax-exempt status for failure to complete the form. However, absent on the lists of organizations required to complete the form are faith-based organizations such as churches.
The fact that the IRS excludes churches from completing the Form 990 has caused some of the required organizations to bring suit alleging the IRS is wrongfully engaging in preferential treatment of churches. Further, these organizations are asking that the court declare the exemptions void as a violation against the Establishment Clause of the United States Constitution.
Exempting churches from completing the Form 990 raises not only interesting constitutional questions, but also more basic fundamental questions as to the justification for exempting faith-based organizations in the first place.