Tuesday, October 04, 2005

Churches and Lobbying

As mean-spirited and anti-liberty as church officials' efforts to pass anti-same-sex-marriage law are, they will not necessarily get a church into tax or other legal trouble. While parishioners may find lobbying offensive and unAmerican, the IRS cuts clerics much more slack.

A recap of the rules appears in HTML here. The gist of it is that churches and their officials absolutely may not campaign for a candidate, but they have to do a ton of legislative promotion and lobbying to pay taxes or lose their 501(c)(3) exemption.

The rules hold true for any charitable organization exempted from taxes under 501(c)(3). The odd twist in Massachusetts for the current lobbying by bishops and priests to strip same-sex couples of the right to marry is that the local Roman Catholic Church already has a lobbying arm, the Massachusetts Catholic Conference, which does not have the same exemption and can shill and shout as much as it wants.

However, Archibishop Sean O'Malley's decision to pressure the bishops and priests to pressure the parishioners to sign petitions at mass also is lobbying too. So, how is it those allegedly concerned with religion may play pulpit politics?

The IRS has that covered with its code. A church (and its bureaucrats) must run afoul of the definition that it "attempts to influence legislation constitute a substantial part of its overall acivities." This is a typical IRS rule, in that it is pretty spongy and if the feds came after a church, it would be in the position of trying to prove a negative, or as the code puts it "determined on the basis of all the pertinent facts and circumstances in each case." In other words, it would be an audit of activities and expenses.

Churches don't get to choose the other yardstick, the expenditure test. They and private foundations have to go with the substantial-part one. For other charitable organizations, they can simply show how much of their budget went to lobbying and compare it with the published guidelines. For example, a large organization with a yearly budget over $1.5 million could devote $225,000 plus 5% of the excess over $1.5 million.

Again, churches have to be able to prove that they are primarily in the business of souls, not influencing legislation...if they gain IRS scrutiny, or (hardy, har) turn themselves in for breaking the rules.

In practice, a church judged to have done excessive lobbying in a year can lose that year's tax exemption and have to pay 5% of its lobbying expenditures in taxes. Also, the top managers, clerics or otherwise, who approved the lobbying may have to pay an additional 5%.

Even that wouldn't be onerous. It might not play well with those whose money went into the collection baskets and plates though.

Ballot initiatives and constitutional amendments fit in the lobbying category. The specific rules include:
An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their tax-exempt status.
So, the short of it, as much as some people may not like the current lobbying, is that the RC Church is not likely to exceed its latitude. Yet losing the good will (and contributions) of communicants because of such activities is another matter.


Anonymous said...

There shouldn't be a tax exemption for churches. Imagine the revenue we're losing every year by granting a tax ememption to churches and priests. Priests ought to have their income taxed just like anyone else, church property should be subject to local taxes, and the priesthood itself should be subject to state regulation and taxation as a business. Because that's more or less what it is, a business selling the "product" of going to heaven.

massmarrier said...

Well, certainly courts have interpreted the first amendment to the U.S. constitution to prohibit taxing them, or their ministers (but not other employees). As a result, you'd suppose church officials would want to keep things clean and stay out of government on their side.

It was always one thing to have preachers advise a POTUS or get drunk with legislators. Yet, it was another to see them pushing the limits. We see one after another trying to get their matters of faith written into law. Archbishop O’Malley’s is a particularly nasty example, but far from the only one.

If they want the government to stay out of their business, they should stay out of the government's. Threatening politicians by refusing communion or even with excommunication is the basest kind of bullying.

In the mid-term, the most effective answer would be to revisit and fine-tune ballot initiatives. Forbidding introducing articles of religious faith as law would be one aspect. Forbidding plebiscites on a minority's rights would be another.

Short term, having voters slam the bullies in Massachusetts and Maine would be an excellent reminder of where the fence is.