Gay Activists Threaten Church Tax-Exempt Status

A.E. Brownstein aebrownstein at
Thu Jun 3 11:44:17 PDT 2004

I'm not sure I fully understand this argument, but I don't know all that 
much about church doctrine or tax law. Can you help me, Tom. Is the 
argument that the religious leaders of certain faith communities are 
prohibited by church doctrine from serving in leadership positions or 
taking on speaking roles in 501(c)(4) organizations? Or is it a tax law 
problem? Do IRS regulations make it difficult for clergy to participate in 
501(c)(4) organizations, perhaps because they receive compensation from a 
501(c)(3)? Can someone work part time at both a 501(c)(3) and part time at 
a 501(c)(4)? Can a church categorize itself as a (c)(4) organization and 
lose its tax exempt status? If so, that takes us back to problems relating 
to the impracticality of segregating one's activities and the cost in lost 
subsidies and exemptions of maintaining organizational and operational 
unity -- but that problem applies to both secular and religious individuals 
and institutions.

I understand the argument that clergy have to be able to be free to speak 
out on political issues. What I'm less clear about is why they have to be 
able to do so from a tax exempt status.

I suppose the second issue suggested by Tom's post is whether church rules 
about polity effectively respond to the free speech concern. If only 
associations expressing a particular viewpoint have certain kinds of rules 
about who can speak for the organization, and that distinction is accepted 
as a justification for regulating the speech of those associations less 
rigorously than the speech of associations with different viewpoints, does 
that resolve the debate distorting consequence of accepting this 
distinction? Avoiding debate distorting government action is, after all, 
why we are concerned about viewpoint discrimination in the first place.

Alan Brownstein
UC Davis

At 11:37 AM 6/3/2004 -0500, you wrote:
>I'm not sure about the following argument, but what do you think of it?  The
>ban on lobbying can be circumvented by setting up a separate 501(c)(4)
>organization, which the Court in Regan said was relevant (if not crucial) to
>its constitutionality.  Suppose that it doesn't cost much in terms of
>administrative duplication to set up the (c)(4), so that in practical terms
>the message can get out to its targeted audience through the (c)(4).  (The
>costs may vary, but Regan seems to assume they're not large.)  But clearly
>certain churches have doctrinally based views about polity, under which
>teaching on the implications of the faith, including social implications,
>must come from those in certain positions of authority in the church:  they
>are the ones who have been given the teaching authority by God.  Does that
>make them distinctive from other organizations -- in terms of their polity
>doctrine, not in terms of their message or the practical costs of separate
>affiliates -- and justify different treatment?  Even if not a free exercise
>exemption, because of Smith, then under a RFRA?  And might this
>distinctiveness as to polity doctrines answer the free-speech argument that
>such distinctive treatment is unconstitutional because it discriminates
>between the viewpoints being expressed?
>A 1988 statement by the Presbyterian Church (USA) puts it as follows:  "No
>church can be restricted to speaking on political issues solely through
>functionaries employed by a political affiliate without violating its faith
>and calling."  Perhaps that states it too broadly; perhaps only certain
>churches truly have such doctrines about polity.  The McConnell, Garvey,
>Berg religion casebook (p. 859) asks the question this way (somewhat
>rhetorically):  "As long as the [Catholic] Church can communicate its
>position on electoral issues, does it matter whether that communication
>comes through an official of a Catholic (c)(4) affiliate or PAC rather than,
>say, a bishop of a diocese?"  It matters greatly.
>Perhaps the answer to this argument is that such an exemption should be
>provided, if at all, to any group, religious or secular, that can show a
>doctrine that teaching must come from certain designated authorities.  But
>that seems to be a feature almost entirely of religious groups -- or an I
>wrong about that?
>Tom Berg
>University of St. Thomas School of Law (Minnesota)
>   _____
>From: Marty Lederman [mailto:marty.lederman at]
>Sent: Thu 6/3/2004 9:08 AM
>To: Law & Religion issues for Law Academics
>Subject: Re: Gay Activists Threaten Church Tax-Exempt Status
>This appears to be the hot-button issue of the day, what with today's New
>York Times front-page story about Bush's attempt to use churches for
><> ), and
>the recent contretemps concerning Bishop Sheridan's politicking (see
>In addition to Marc Stern's point, I'd add that it's long struck me as odd
>that this is viewed as a serious constitutional issue.  All nonprofits that
>wish to receive the tax benefit, religious and secular, churches and other
>entities, are limited in the amount of electioneering they can do.  If
>there's a problem with this condition, it's a policy, not a constitutional,
>concern (see, e.g., Regan), and is not limited to churches.  Even pre-Smith,
>any Free Exercise claim would have been on extremely weak ground (on
>"substantial burden" grounds, primarily); and post-Smith, it's difficult to
>see what the claim would be.  Moreover, if the IRS were to allow churches,
>but not secular nonprofits, to use tax benefits to engage in electioneering,
>that would be a fairly straightforward Free Speech violation (giving a
>religious preference w/r/t to core political expression), and would raise
>serious Establishment Clause questions, as well.  As Chip Lupu has written
>w/r/t this tax-exemption, "the area of political activity is one in which
>the claim to the constitutional uniqueness of religion is unusually weak,
>and the claim to equal participation by all is unusually strong."
>Having said that, I should note that Rick Garnett and Steffen Johnson
>advanced serious arguments against the condition in the July 2001 Boston
>College Law Review.  Although I haven't read those pieces in a while, I
>recall thinking that they were quite formidable, if ultimately unpersuasive
>to this reader.
>----- Original Message -----
>From: marc stern <mailto:mstern at>
>To: 'Law  <mailto:religionlaw at> & Religion issues for Law
>Sent: Thursday, June 03, 2004 9:44 AM
>Subject: RE: Gay Activists Threaten Church Tax-Exempt Status
>There really is nothing to the threat. Churches are free to take stands on
>political issues provided they do not spend a "substantial" amount on these
>activities. The late Dean Kelly obtained an internal IRS memo which indicted
>that insubstantial was between 5-20% of an organization's budget. The
>document was informal and would not bind the IRS, but it describes a fairly
>safe harbor. Non-church groups can opt for a different and more predictable
>set of rules, but at the behest of churches which then insisted that the
>government could not stop them from advocating for legislation at the
>expense of exemption, churches were not offered the option.
>Marc Stern
>   _____
>From: religionlaw-bounces at
>[mailto:religionlaw-bounces at] On Behalf Of Francis Beckwith
>Sent: Thursday, June 03, 2004 8:16 AM
>To: Religion Law Mailing List
>Subject: Gay Activists Threaten Church Tax-Exempt Status
>Importance: Low
>Just got this from a friend.  It is published by "Focus on the Family," a
>conservative Christian outfit in Colorado Springs.
>June 1, 2004
>Church's Tax-Exempt Status Threatened
>by Steve Jordahl, correspondent
>Pro-homosexual group lodges complaint with the state against a Montana
>church that aired the "Battle for Marriage" satellite broadcast.
>A Montana church, one of hundreds across the country to broadcast a
>pro-marriage TV special on May 23, has been threatened by a gay-activists
>group with removal of its tax-exempt status.
>Canyon Ferry Road Baptist Church in Helena showed congregants "The Battle
>for Marriage" - a video simulcast featuring Focus on the Family Chairman Dr.
>James Dobson and other pro-family leaders - and circulated a petition at the
>event calling for a state constitutional amendment supporting traditional
>marriage. Those actions rankled the gay-activist group Montanans for Family
>and Fairness, which lodged a complaint with the state's Commission of
>Political Practices.
>The complaint alleges that what the church did "may ... have implications
>for an organization's tax status." The commission has said it will
>investigate, but Alliance Defense Fund (ADF) attorney Gary McCaleb said the
>argument is without merit.
>"The letter that was sent out by these far-left activists is outrageous,"
>McCaleb said. "I think it's defamatory, and it's certainly an intolerant
>effort to suppress free speech."
>Canyon Pastor B.G. Stumberg said his church is not intimidated. The
>commission is unable to affect a church's tax-exempt status on its own, but
>a decision against the church is the first step in stripping a congregation
>of its tax benefits.
>"I don't think it's scaring us at all," he said. "It's sort of galvanized
>us, in one sense, (and) I think everybody's sort of saying, 'OK, let's go.'
>The letter was also sent to several hundred other Montana churches, an
>obvious attempt to make them think twice about addressing the issue of gay
>marriage. McCaleb said churches should press ahead, anyway.
>"You certainly don't convert your church into a political committee," he
>explained, "when you speak out in favor of marriage."
>The ADF, McCaleb added, would be happy to consult with any church that has
>Copyright © 2004 Focus on the Family
>All rights reserved. International copyright secured.
>(800) A-FAMILY (232-6459)
>Privacy Policy/Terms of Use
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