“Tax The Mormon Church!”: Why This Strategy Will Not Work

As No-On-8ers, we here at Johnny California are buried in petitions and calls to action urging us to get involved in the “Tax the Mormon Church” movement. We want to help our fellow No-On-8ers understand the issue, point out why the law is in favor of the Mormon church, and explore the idea of taxing churches in general.

Legal Issues

Like the other “Tax the Mormon Church” blogs and petitions, LDS501c3 contends that the LDS church should lose its non-profit status based on a violation of 26 U.S.C. 501(c)(3) which says, in relevant part, that when any organization is “formed exclusively for religious purposes” then a “substantial part” of the church’s activities cannot entail “propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)).”

A few things here. First, arguing over what is a “substantial part” of church’s activities will keep lawyers busy and rich for years.  Second of all, even if what the LDS church’s role in the Prop 8 campaign was considered a “substantial” part of their activities, the church still did not violate the law.   Contrary to what LDS501c3 believes, about “subsection (h)”, religious organizations are allowed to advocate for ballot proposition measures, they’re just not allowed to advocate for candidates.

Just so you don’t think we’re the only No-On-8ers who think it’s a bad strategy, check out Todd’s Hammer (a No-On-8er):

The Mormon church did not break any law. It’s within their rights according to the IRS code to advocate publicly and spend money to advocate for political issues. Like all churches/non-profits, they are only barred from campaigning for candidates.  The website “Mormons Stole Our Rights” is wrong on the legal facts (it ignores subsection (h) of the tax code they site) and this will lose in any court in America. Ask any tax attorney and they’ll spell it out for you.

The Bigger Picture – Should We Tax a Religious Organizations On Money Raised For Political Advocacy?

One idea that’s been kicked around is making churches pay taxes on any funds raised to advocate for or against political issues.  Our question to No-On-8ers who like this idea is this: Should the Methodist and Episcopal churches who came out against Prop. 8 be taxed as well?

Our other question is how does one draw the line between “charity” and “advocacy”?  For example, what category does the Catholic church’s Homeboy Industries fall into?  Homeboy helps people get out of street gangs, into job training and advocates for criminal justice reform (“Jobs not jails” is one of their slogans).  Homeboy founder Father Greg Boyle came out strong against Proposition 6.  And what about the American Jewish World Service , should they be taxed because they call for divestment from Darfur?

We agree with Lee Stranahan at HuffPo who says:

Trying to take away the tax exempt status of churches you don’t like only makes it easier to take away that status for churches with inclusive agendas, like the Unitarian Universalists. Even that doesn’t matter, however, since it won’t happen.

Once again, we say the best bet is hold have positive, inclusive, and inspiring rallies, to pursue the legal challenge, and if the legal challenge fails, to push for a ballot measure in two years, but with a better campaign — which we discuss here.