With gay marriage on the books, tax exemption questioned for churches, religious schools

by Gregory Tomlin |

(REUTERS/Lucas Jackson)Civil rights activist Rev. Sharpton speaks at the Greater St. Mark Family Church about the need for long-term change as he discusses reactions to the shooting of teenager Michael Brown in Ferguson, Missouri, Aug. 17, 2014. Sharpton used the opportunity to organize political resistance to state authorities and Ferguson police in the sermon. Sharpton, Jessie Jackson, Bill Clinton, Joe Biden and other Democrat politicians, including Democratic presidential candidate Hillary Clinton, frequently use church pulpits to preach a political message, usually without complaints of entangling religion and politics from liberal watchdog groups -- and without consequence to the churches hosting them. The same courtesy does often not extend to churches who invite conservative politicians to speak. Now, the push is on for churches that oppose same-sex marriage to surrender their tax exempt status because of their political beliefs.

NEW YORK (Christian Examiner) – Opponents of legalized gay marriage predicted – long before the Supreme Court decided to legalize same-sex marriage nationwide in Obergefell v. Hodges – that the tax exempt status of America's churches and religious non-profits who disagree with the practice would likely be in jeopardy.

Now, that prediction is reality.

In an editorial in Time magazine two days after the ruling, gay rights advocate Mark Oppenheimer wrote churches and all other non-profits should lose their tax exempt status.

"Rather than try to rescue tax-exempt status for organizations that dissent from settled public policy on matters of race or sexuality, we need to take a more radical step. It's time to abolish, or greatly diminish, their tax-exempt statuses," Oppenheimer wrote.

Oppenheimer wrote that he believed that system of tax exemption for churches and non-profits had resulted in the Internal Revenue Service deciding what organizations were religious, unnecessarily entangling the government and religion. For instance, the Church of Scientology was granted tax exempt status is 1993, and the First Church of Cannabis, a "church" in Indiana where participants gather to smoke marijuana, recently received tax exempt status from the federal government.

In that respect, Oppenheimer feigned fidelity to the First Amendment. He then added, however, that the government's failure to tax churches, religious organizations and even universities leaves vast quantities of money on the table, unused for the public good. In his reasoning, the government could take the money and do better with it.

"Defenders of tax exemptions and deductions argue that if we got rid of them charitable giving would drop. It surely would, although how much, we can't say. But of course government revenue would go up, and that money could be used to, say, house the homeless and feed the hungry. We'd have fewer church soup kitchens — but countries that truly care about poverty don't rely on churches to run soup kitchens," Oppenheimer wrote.

Legal gay marriage is not the endgame for the gay-rights movement. It never was. Moral approval is the endgame. The agenda is not tolerance for different beliefs and lifestyles. The agenda is a demand that everyone get on board with the moral revolution or be punished. That means if you or your church won't get with the program, then the revolutionaries will endeavor to close you down.
- Denny Burk, Boyce College

That discussion is almost purely academic, but not so when it comes to belief. Oppenheimer said he believes churches do not serve the public good the same way a hospital does.

"The logic of gay-marriage rights could lead to a reexamination of conservative churches' tax exemptions (although, as long as the IRS is afraid of challenging Scientology's exemption, everyone else is probably safe). But when that day comes, it will be long overdue. I can see keeping some exemptions; hospitals, in particular, are an indispensable, and noncontroversial, public good. And localities could always carve out sensible property-tax exceptions for nonprofits their communities need. But it's time for most nonprofits, like those of us who faithfully cut checks to them, to pay their fair share," Oppenheimer wrote.

That type of thinking is what concerns Richard Land, president of Southern Evangelical Seminary and former president of the Southern Baptist Convention's Ethics & Religious Liberty Commission.

Land said recently the government will "threaten the tax-exempt status of traditional churches that refuse to compromise their beliefs on same-sex marriage, they'll come after the accreditation of Christian colleges that do not allow same-sex couples to live together and to engage in homosexual activities, they will come after the student loans."

Al Mohler, president of the Southern Baptist Theological Seminary in Louisville, Ky., agreed. He wrote after attorneys argued Obergefell v. Hodges before the Supreme Court that many scholars and leaders of religious organizations recognize the effect such a decision could have on churches and Christian universities. Mohler cited Marc Stern, who was then representing the American Jewish Congress.

Stern said the legalization of same-sex marriage represents a significant shift in public ethics – a move from "an egalitarian-based ethic over a faith based one, and not just legally."

"The remaining question is whether champions of tolerance are prepared to tolerate proponents of a different ethical vision. I think the answer will be no," Stern said.

Mohler also wrote:

"The crippling effects of a loss of tax-exempt status was acknowledged at the Becket Fund event by Jonathan Turley of the George Washington University Law School. 'The debate over same-sex marriage,' he explained, 'has become for the twenty-first century what the abortion debate was for the twentieth century: a single, defining issue that divides the country in a zero-sum political battle.'

Consider his words:

'Many organizations attract members with their commitment to certain fundamental matters of faith or morals, including a rejection of same-sex marriage or homosexuality. It is rather artificial to tell such groups that they can condemn homosexuality as long as they are willing to hire homosexuals as a part of that mission. It is equally disingenuous to suggest that denial of such things as tax exemption does not constitute a content-based punishment for religious views.'"

Religious schools will likely be challenged first because there is legal precedent if the idea that homosexuality is analogous to race is accepted by the Court, as it seems it has been. The Los Angeles Times floated that idea recently.

The paper noted that Bob Jones University in South Carolina, which rose to prominence in the wake of the American fundamentalist movement in the 1920s and 1930s, imposed a penalty of expulsion on any student engaged in an interracial relationship. According to the paper, the Nixon administration threatened in 1970 to lift its tax exempt status, but the IRS did not act until 1976.

A long legal fight ensued, with the school losing its tax exempt in 1983, long after the Court legalized interracial marriage in 1967.

Today, religiously-affiliated universities all make hiring, housing and, sometimes, termination decisions based on topics such as religious beliefs on human sexuality for the express purpose of filling their ranks with individuals who share their religious values, code of ethics and mission.

"[W]ith one fell swoop of the pen, the president of the United States by an executive order could say, 'we will not allow any federally guaranteed student loans to be used in any college that in any way, shape, or form discriminates against homosexuals.' That would put a lot of Christian colleges out of business almost immediately," Land told NewsMax the same day of the Supreme Court's 5-4 ruling in favor of same-sex marriage.

Pressure has been mounting on the IRS to reduce the "tax benefits" or "subsidies" provided to churches. Opponents like the Freedom from Religion Foundation, an atheist lobby that seeks the removal of all religious language and discussion from public life, recently settled a lawsuit with the Internal Revenue Service over its failure to enforce tax regulations on churches who spoke on cultural and political issues – "politicking" as the FFRF called it.

[W]ith one fell swoop of the pen, the president of the United States by an executive order could say, 'we will not allow any federally guaranteed student loans to be used in any college that in any way, shape, or form discriminates against homosexuals.' That would put a lot of Christian colleges out of business almost immediately.
- Richard Land, Southern Evangelical Seminary

Christians and those of other faiths have been allowed to deduct their contributions to churches and religious organizations since 1917, when the government amended its revenue code out of the fear that the economic turmoil created by World War I might dampen charitable giving. That change was a welcome concession to the progressive income tax imposed a few years before.

Things changed dramatically in 1954, when Lyndon B. Johnson, soon to be president, pushed through an amendment to the newest revenue act classifying churches as "non-profits" subject to the rules of other 501(c)(3) organizations. Johnson, angry at some church's opposition to his political agenda, used the law as a way to silence the churches.

It worked all too well. Churches, which had never been required paid taxes in American history, were suddenly threatened with heavy taxes and penalties if they refused to comply and ministers spoke on political issues.

The result was the church's retreat from American political life, contrary to the legacy established in the American Revolution and the Civil War when political discussions and religious opinions were intertwined. Northern churches, for instance, repeatedly spoke against slavery and endorsed anti-slavery candidates for office.

Today, the IRS provides churches with lengthy guidance on what constitutes religious speech and what is political. To many, the advice is still confusing. Can a pastor speak on political issue? Can a candidate speak at a church service? Can a church publish voter guides on hot-button social issues?

In 2013, the Evangelical Council for Financial Accountability (ECFA) issued a report calling on the government to clarify its positions on the matter.

In the lengthy report, chairman Michael Batts claimed the law which has existed since 1954, forbidding the endorsement of candidates and political speech from the pulpit on their behalf, "is the only law of its type on the books . . . the only law that allows the Internal Revenue Service to evaluate the content of a sermon delivered by a member of the clergy . . . the only law that could cause a church to lose its federal tax exemption based on the words spoken by its leaders in a worship service."

"Federal government officials also know instinctively that the law, as currently interpreted and applied, is problematic—which is why the law is largely unenforced in some respects and inconsistently enforced in others. The law prohibiting political campaign participation and intervention by 501(c)(3) organizations as currently applied and administered lacks clarity, integrity, respect, and consistency," Batts also wrote.

Still, liberal groups like Americans United for Separation of Church and State argue the law is clear and pastors should remain quite. If anything, Barry Lynn, executive director of the group, said the law is not enforced enough.

"There is ample evidence of pastors openly violating the law. It's time for the IRS to act," Lynn said.

That is what Denny Burk, a professor of biblical theology at Boyce College of Southern Seminary, fears. He writes at The Federalist that the silencing of all religious dissent to the sexual revolution is the goal of those now calling for the church to lose its tax exempt status.

"Legal gay marriage is not the endgame for the gay-rights movement. It never was. Moral approval is the endgame. The agenda is not tolerance for different beliefs and lifestyles. The agenda is a demand that everyone get on board with the moral revolution or be punished. That means if you or your church won't get with the program, then the revolutionaries will endeavor to close you down," Burk wrote.

"But they aren't going to say, 'We'll close you down,' in so many words. They will cover it in propaganda that conceals their real aim. They'll say, as Oppenheimer does, that taxpayers are 'subsidizing' churches, that ministers make fat-cat six-figure salaries, and that government should get those rich priests and preachers off the government dole."

"Never mind that the average base salary of a full-time senior pastor ranges from $33,000 to $70,000 (source). Never mind that ministers do pay income taxes. Never mind that it is absurd to suggest not paying taxes is a subsidy. Never mind that exemptions do function to keep church and state out of one another's business. That doesn't fit the fictional narrative activists wish to advance—that these churches don't deserve to have their 'subsidy' continued in light of their intolerable views on sexuality."

Lynn and Americans United frequently file formal complaints with the IRS against conservative pastors who speak on political issues or Christian universities who host candidates. It recently urged the IRS to enforce its rules on Liberty University, which hosted several Republican presidential candidates (Ted Cruz and Jeb Bush) as speakers. They do not file complaints against those preaching in favor of liberal causes or candidates.