Monday, September 24, 2012

A message to lobbyists in the pulpit: free speech does not mean tax-exempt speech.

The headline is "More than 1,000 pastors plan to challenge IRS by endorsing presidential candidate."  The case for revocation of federal tax-exemption in these cases is 100% clear.  The U.S. tax code exempts charitable organizations from federal taxation so long as they are not engaged in lobbying:
Corporations ... organized and operated exclusively for religious, charitable ...[etc] purposes ... no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation ... and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office [shall be exempt from taxation under this subtitle].  26 U.S.C. 501(c)(3).
That's the U.S. Code, written by the Congress and enacted through legislative process into law.  Not some whimsical action by the IRS, an agency of the federal government.  Yet the leader of the campaign tries to make this about suppression of free speech by the IRS:
The purpose is to make sure that the pastor — and not the IRS — decides what is said from the pulpit,” Erik Stanley, senior legal counsel for the group, told " “It is a head-on constitutional challenge.”
This is plain and simple a fabrication. There is no constitutional challenge here because there is no denial of free speech here. The IRS does not tell you what you can or can't say from the pulpit, any more than it tells you what you can or can't say anywhere else.  Rather, the IRS is supposed to enforce the law as written.  As far as the code goes, it is a pretty clear rule.  You can say whatever you want but the fed does not have to pay you for it. So the right result here is revocation of exemption status.  

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