While the New Testament clearly provides the blueprint for the Church organization, less clear is the Church's relationship with civil authority. We are told to be subject to the powers that be, pay our taxes, and to not speak evil of dignitaries. To what extent the Church should or can involve itself with political candidates and campaigns can only be inferred from the scriptures. One thing is certain in election year 1996, the Internal Revenue Service has clearly state their position on church involvement, and it is one worth noting.
Many churches have chosen to incorporate (form a legal entity) for a variety of reasons. These can include:
- Protection of church assets
- Transferal of legal liability to corporation
- Starting a building project
- Procuring a loan
- Obtaining tax-exempt status
All incorporated churches are done so under section 501, 3 of their codes which exempts "religious, nonprofit, and charitable" organizations from federal income taxation. This part of the tax code is in keeping with the constitutional commitment to "separation of church and state" and freedom of religion, cornerstone of this democracy. The tax-exempt status carries this restriction for the church:
"No substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for political office."
There are two distinct limitations here:
- Churches are prohibited from substantial efforts to influence legislation.
- Churches are absolutely prohibited from participating in a current election, or backing (or bashing) a current candidate.
The church that violates the above limitations risks losing their federal income tax-exemption. The loss of that exemption would more than likely cause that church to be liable for state, sales and property taxes as well.
All church members would not be able to deduct contributions made to that church on their individual tax returns. That church would become subjected to the host of regulations that all "small businesses" must contend with on a daily basis.
Then-Senator Lyndon Johnson introduced the legislation in 1954 as a floor amendment that was passed without explanation. It is apparent that Senator Johnson was trying to limit the power of a foundation that had supported an opponent in a Texas election. It is also clear that very few congressmen in 1954 realized the impact in 1996 this change would make.
The church at Pierce Creek (New York) published an "open letter" to the "Christian Community" in the Washington Times and USA Today, one week before the 1992 election. The letter listed Bill Clinton's views on abortion, homosexuality, and the distribution of condoms in public schools. It ended with the question, "How then can we vote for Bill Clinton." The IRS in 1995, after carefully investigating the circumstances, revoked the church's federal tax exemption for "intervening in a political campaign." This is the first time the IRS has ever taken such a drastic action against a church. Since that ruling (currently under appeal) the IRS has moved against several "Individual Ministries," such as Jimmy Swaggart, to tax certain activities that appear to be politically affiliated and therefore violations of the tax code.
We can only speculate why the IRS has just recently begun to enforce this 40 year old provision of the tax code. The 1988 Presidential election had two ordained ministers fully supported by their respective churches, yet no IRS sanctions were contemplated. The IRS has made it clear that the 1996 campaign will be different, where appropriate, offenders will be penalized for violating the terms of their religious, nonprofit status.
Sources for this article include the Congressional Record and Church Law and Tax Report.
