Please Help!! Tax religious organizations!!

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AMERICAN ATHEISTS V. SHULMAN

How you can help
This case has the potential to undo the discrimination that has been written into our tax code. We have no doubt that this is a case that will go all the way to the Supreme Court. To help ensure that American Atheists has the resources we need to carry this case to the end, we need your help. Please consider making a tax-deductible gift to American Atheists to support our critically important legal work.

To donate, please click here.

Introduction
On December 12, 2012, American Atheists and two co-plaintiffs filed a lawsuit in U.S. District Court in the Eastern District of Kentucky demanding that the Internal Revenue Service (IRS) stop giving preferential treatment to churches and religious organizations via the process of receiving non-profit tax-exempt status under the Internal Revue Code (IRC) procedures and definitions.

Groups like American Atheists receive tax-exempt status under Internal Revenue Code 501(c)(3) but, because the organization is not classified as religious, it costs American Atheists and other secular non-profits significantly more money each year to maintain that status. In this lawsuit, American atheists and the other plaintiffs are demanding that all tax-exempt organizations, including those characterized as religious by the IRS, have the same requirements to achieve and maintain tax-exempt status.

In order to qualify for nonprofit tax-exempt status, any religious or secular organization must demonstrate it exists to benefit the public. After that basic element is established, religious non-profits are almost always declared automatically tax-exempt under the current IRC rules and definitions. However, secular non-profits face a lengthy application and a fee, which can be as high as $850.

Religious organizations and churches are treated differently from secular organizations. The exemptions are applied in a way that discriminates solely on the basis of whether an entity’s members express beliefs and practices accepted as religious. The IRS treats your organization better if you profess belief in a supernatural deity.

The lawsuit also covers discrepancies in how secular and religious organizations are treated in maintaining their tax-exempt statuses. Secular nonprofits complete Form 990 annually, which details information about finances, donors, volunteers, and personnel; the IRS estimates it requires 211 hours to complete the Form 990, which is then public information. Religious nonprofits are exempted from filing the Form 990, so there is no public record about their finances, donors, volunteers, or personnel.

This requirement can put organizations like American Atheists at a fundraising disadvantage compared to religious groups because many people choose not to reveal their atheism for fear of prejudice and discrimination.

American Atheists and its co-plaintiffs are asking the Court to find that such disparity of treatment between religious and secular non-profit organizations is unconstitutional and require the IRS to make the tax-exempt filing process uniform for all nonprofit organizations.

Government Motion to Dismiss
On June 7, 2013, the United States government filed a motion to dismiss our lawsuit. In their filing, the Government, among other things, challenged American Atheists’ standing to bring such a suit, alleging that we had suffered no real harm from their preferential treatment of religious groups in tax filings.

On August 6, 2013, American Atheists filed a response to the Government’s motion to dismiss.

Oral Arguments
On November 21, 2013, American Atheists’ National Legal Director Edwin Kagin argued the case before the United States District Court, Eastern District of Kentucky, in Covington, Kentucky. The case was heard by Senior Judge William O. Bertelsman. The full name of this case is American Atheists, Inc. v. Shulman.

Distrit Court Rules
On May 19, 2014, the District Court ruled on the government’s motion to dismiss. The Court ruled in favor of the government’s motion. The full ruling is available here. American Atheists is currently evaluating the decision and will determine the next steps shortly.

-Churches suck over $87 Billion out of the tax system every year by not paying their fair share! These organizations pilfer billions a year from parishioners that foolishly donate money to them every year. Many religious charities give money to support services to the poor, but many of these tax evaders also steal money to keep their leaders rich! LET THEM FUCKING PAY TAXES!!!!

Church Tax exemption!!

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You give religions more than $82.5 billion a year

This is Joel Osteen. You helped pay for his house. (The Washington Post)

Matt Yglesias thinks we ought to start taxing churches. “Whichever faith you think is the one true faith, it’s undeniable that the majority of this church-spending is going to support false doctrines,” he notes. Even if you did direct the money toward the one true faith, it’d still be a bad idea, as “Upgrading a church’s physical plant doesn’t enhance the soul-saving capacity of its clergy.”

Regardless of whether you buy Yglesias’s logic, this raises an interesting question — exactly how much money are we talking about here? If, all of a sudden, churches, synagogues, mosques and the like lost their tax privileges, how much tax revenue would that generate?

Ryan T. Cragun, a sociologist at the University of Tampa, and two of his students, Stephanie Yeager and Desmond Vega, took it upon themselves to figure it out. They’re not exactly disinterested parties; their research appeared in Free Inquiry, a publication of the Council for Secular Humanism. But Cragun is a serious sociologist of religion and the data seems to check out. The full scale of subsidies religions get is pretty staggering:

tax_code_religionsWhen people donate to religious groups, it’s tax-deductible. Churches don’t pay property taxes on their land or buildings. When they buy stuff, they don’t pay sales taxes. When they sell stuff at a profit, they don’t pay capital gains tax. If they spend less than they take in, they don’t pay corporate income taxes. Priests, ministers, rabbis and the like get “parsonage exemptions” that let them deduct mortgage payments, rent and other living expenses when they’re doing their income taxes. They also are the only group allowed to opt out of Social Security taxes (and benefits).

subsidies_table

Cragun et al estimate the total subsidy at $71 billion. That’s almost certainly a lowball, as they didn’t estimate the cost of a number of subsidies, like local income and property tax exemptions, the sales tax exemption, and — most importantly — the charitable deduction for religious given. Their estimate that religious groups own $600 billion in property is also probably low, since it leaves out property besides actual churches, mosques, etc.

The charitable deduction for all groups cost about $39 billion this year, according to theCBO, and given that 32 percent of those donations are to religious groups, getting rid of it just for them would raise about $12.5 billion. Add that in and you get a religious subsidy of about $83.5 billion.

 

Of course, these subsidies do more than reduce revenue. Property tax exemptions, in particular, distort real estate construction decisions and allocate more land to religious entities than would otherwise be the case, which drives up rents for everyone else (especially since religious groups tend not to buy property in high-density, skyscraper-style developments and instead get a whole lot of land for themselves).

Dylan Matthews
Dylan Matthews covers taxes, poverty, campaign finance, higher education, and all things data. He has also written for The New Republic, Salon, Slate, and The American Prospect.