Tuesday, July 19, 2022

Family Research Council Is Now a Church

Cosmic-timetraveler-_R1cc2IHk70-unsplashA little over a week ago, ProPublica reported that the Family Research Council filed with the IRS to be treated as an association of churches for tax purposes.

Is the FRC an association of churches? Not in any colloquial sense; rather, it's an advocacy group that, in its words, works to "advance faith, family, and freedom in public policy and the culture from a biblical worldview" (which it does, according to SPLC research, largely by denigrating and attacking the LGBTQ community). It claims to meet 11 of the IRS's 14 criteria for qualifying as a church, though many of those claims seem like a stretch.

And its worth noting at this point that FRC isn't the only organization to claim (and obtain) church status where the claim of being a church is a stretch. It has become an aspiration model for activist organizations. And why?

Probably because the tax law treats churches better than other organizations exempt under section 501(c)(3). Most importantly, perhaps, is that churches and associations of churches don't have to file a Form 990 with the IRS. That means no significant public or IRS scrutiny of their finances. (It also shields their donor base, though public charities--unlike private foundations--don't have to make their donors public. Still, the IRS would have access to a list of donors.)

Secondarily, the Code provides significant impediments to the IRS auditing churches (though with a tax-exempt audit rate of 0.13%, and with 20% of tax-exempt returns selected for examination closed without an exam, this is probably a less-compelling reason).

As both a religious person and a tax person, I find political organizations classifying themselves as church distasteful. And frankly, I imagine non-church tax-exempt organizations don't love it. They either have to alter their behavior so they meet enough of the criteria or they have to lie on their application, neither of which allows them to fully do the things they want to do. 

So what can be done? I'm skeptical that the IRS can do significantly better at gatekeeping. Not only is it underfunded, but for constitutional and First Amendment reasons, it makes sense for government agencies to tread lightly where an organization claims to be a church. This seems like a perfect place, though, for Congress to step in. There's no compelling reason, beyond successful lobbying, for churches to be treated differently from other tax-exempt organizations for tax purposes.

Samuel D. Brunson

Photo by Cosmic Timetraveler on Unsplash

https://lawprofessors.typepad.com/nonprofit/2022/07/family-research-council-is-now-a-church.html

Church and State, Current Affairs | Permalink

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