Posted on 05/09/2008 4:59:22 PM PDT by 2ndDivisionVet
NEW YORK — Conservative legal advocates are recruiting pastors nationwide to defy an IRS ban on preaching about politicians, in a challenge they hope will abolish the restriction.
The Alliance Defense Fund, based in Scottsdale, Ariz., will ask the clergy to deliver a sermon about specific candidates Sept. 28. If the action triggers an IRS investigation, the legal group will sue to overturn the federal rules, which were enacted in 1954.
Under the IRS code, churches can distribute voter guides, run voter registration drives, hold forums on public policy and invite politicians to speak at their congregations.
However, they cannot endorse a candidate, and their political activity cannot be biased for or against a candidate, directly or indirectly.
The Alliance Defense Fund said Friday that the regulations amount to an unconstitutional limit on free speech and government intrusion into religion.
“It certainly does have a chilling effect,” said Mike Johnson, senior counsel for the fund. “I think that there is a lot of fear and intimidation and disinformation about the parameters that do exist.”
Johnson said about 100 pastors have expressed interest in participating so far.
The IRS has stepped up monitoring of nonprofit political activity during the 2008 election. Punishments can range from a financial penalty to loss of tax-exempt status.
IRS investigations are confidential and the agency does not discuss the cases.
However, the United Church of Christ, which counts Sen. Barack Obama as a member, has said that it is under IRS review because of a speech given by the Democratic presidential candidate at the denomination’s national meeting last year.
Americans_United_for_Separation_of_Church_and_State, an advocacy group in Washington, monitors church political activity and consistently files complaints with the IRS. They said Friday that they will notify the agency of any pastor who participates in the ADF campaign.
(Excerpt) Read more at elections.foxnews.com ...
Freedom of speech MUST be stifled! /sarc
There is selective enforcement against ONLY English speaking religious groups.
IRS can be beat, and bad, because of their failure to enforce the standards against everyone.
I'd start with a FOIA request that describes any comparable IRS action against any non-English speaking group ~ odds are good they cannot respond.
There's your lawsuit. Been there all along.
Liberal churches and black churches are exempt from IRS rules.
That is the good news.
It is my understanding, however, that the trade-off would be this: Just about everything purchased would be subject to a national sales tax--even many things that are not currently taxed at any level of government.
So my question is this: Would this new form of taxation extend to healthcare? (If so, either the insurance carrier would decline to pay this tax; or, if it did pay it, this extra expense would be passed along to the consumer in the form of higher premiums, fewer benefits, larger co-pays and/or coinsurance, heftier deductibles, a larger annual cap on out-of-pocket expenses--or some combination of the above.)
Again, I confess my ignorance on the subject. Does anyone know if healthcare would be subject to taxation under the most common "Fair Tax" plan? It is really a very large item for us.
Does anyone think that anything will really come of this? We are talking about a democrat here, so nothing will happen. Democrats are exempt from following any laws and/or rules.
read later
FLAT TAX of 17% for EVERYBODY!
So you want to modify the FairTax HR25 so that the tax must be collected on donations to Churches ?
If not, then the FairTax retains the same tax-exempt status on Churches as the Income Tax.
As long as Churches are expecting special tax treatment, then they must stay out of politics. So the FairTax is not an “answer” to this problem.
Why 17% ? That’s ridiculously high. It would only require a 10% Flat Tax on income to replace all the Federal income taxes currently collected.
A 10% tax on all income — including benefits like health insurance, pension and 401k matching provided by employers — would provide $1.4T revenue. That would replace all the income taxes (individual and corporate), gift taxes, and estate taxes now collected. You would think people would be willing to trade all the itemized deductions, tax credits, child credits, EITC, charitable deductions, mortgage interest deductions, etc. for the simplicity of a 10% tax on all income, wouldn’t you ? Taking away all the deductions — even (especially) the standard decution — is the only way to ensure EVERYBODY pays income taxes and has a stake in voting for responsible government spending.
Leaving in place the 7.65% mandatory SocialSecurity/Medicare contribution on wages up to $100K and the 1.6% Medicare contribution on wages above $100K, plus the existing excise and duties and tariffs constitutes the remainder of total Federal revenue.
Instead, Obama and other Dems are out there screaming that some people’s “fair share” is 39% of their income — so that other people can pay ZERO.
So church pastors have to pay a “tithe” to the king to exercise a right they were given by their creator. Is that where you’re coming from?
Under the fairtax wouldn't they have to send in 30% to the federal government whatever they pay their minister and for most every expense they have? The fairtax gives no special treatment to churches as the current system does. It is really no special treatment to consider donations exempt since that can't be construed as consumption anyways.
Of course none of this has anything to do with the topic of this thread, which seems to have been hi-jacked.
Churches could bypass most of these issues if they just did not become a 503(c) organizations. Churches are automatically exempt without it.
Of course none of this has anything to do with the topic of this thread, which seems to have been hi-jacked.
The topic is the ban on churches' political activities in order to maintain their tax exempt status. None of that would even be in question under the FairTax. We wouldn't be having this discussion. So the FairTax is one way to solve the problem - and it is a problem, telling a religious leader that he/she can't endorse a political figure from the pulpit without paying taxes to the king.
What's your solution?
The fairtax doesn't 'solve' this problem, it eliminates all special breaks for churches and in fact taxes the pay of ministers. What kind of a hosed up solution is that? Of course the fairtax doesn't tax Churches income, because it taxes expenses.
It doesn't demand a forfeiture of rights either.
“So church pastors have to pay a “tithe” to the king to exercise a right they were given by their creator. Is that where you’re coming from?”
We haven’t had a king in a long time. In answer to the “gist” of your question, however, everyone else pays income tax and gift tax on money they receive from other people, yet churches enjoy SPECIAL tax treatment. That SPECIAL treatment has conditions attached. So they eithr accept the conditions and continue to receive their SPECIAL tax treatment, or they REJECT the conditions and REJECT the SPECIAL tax treatment. It is the churches that accepted the conditions on exercise of their rights. If thy want to reject the conditions and pay income tax on all the donations they receive, then that’s fine, too. It is entirely up to them.
“None of that would even be in question under the FairTax.”
Wrong ! The FairTax exempts the collection of tax on donations to the church. That is EXACTLY the same tax exemption the church has now. It provides the same incentive to donors, as compared to other spending.
The same restrictions of political activities would need to apply under the FairTax or else the church would not be allowed to accept money from donors. They would have to collect FairTax on all donations if they want to reject the special status that allows them to take money tax-free and play in politics.
Of COURSE, it would be an issue under the FairTax just as it is under the existing system.
I try to be at least slightly practical, and I'm not sure the FairTax is that. Too big a change, and I frankly fear the transition in which after-tax savings not in 401(k)s/IRAs would be taxed again with the sales tax when ultimately used. And I question whether that objection can be overcome, even for me - and I am willing to listen to reason, at some length. And when you consider the need to amend the Constitution to put a stake thru the heart of the IRS, I just think it's a bridge too far.As long as Churches are expecting special tax treatment, then they must stay out of politics. So the FairTax is not an “answer” to this problem.IMHO Steve Forbes had it right with the flat tax, even better than his own salesmanship portrayed it. He foundered on the objection to the lack of a mortgage interest rate deduction, but he should have taken that in stride without giving ground. The key is in the transition - always the transition! - not in the steady state operation of the flat tax.
The reason the mortgage deduction was already addressed in the flat tax is that - given that the flat tax rate is equal for the borrower and the lender - it doesn't actually matter whether you tax the borrower or the lender, because the market will price the two situations differently. And since Forbes' model would not tax the lender, the borrower would be in the position of selling a tax-free bond. So, on a new mortgage, the lender would accept a lower tax-free interest rate which would compensate the borrower for the loss of the deduction. The market would demand it, and deliver it.
So, back to the transition. For all existing mortgages, fairness would require that interest rates be cut by the government to account for the difference in the location of the tax burden. And, as I say, with only one tax rate for buyer and seller there would be a simple model of what was fair. Otherwise the lender would get a windfall out of the hide of the borrower - until such time as the borrower refinanced.
Why go to the trouble? Because after the transition, the paperwork for the transaction disappears! The government doesn't have to know about the transaction at all - doesn't have to know about the lender's income, since it's not taxed, and doesn't have to know about the borrower's cost, since it's not deducted. And, the interest rate means what it says, and neither more nor less. The borrower no longer has to figure out how much the interest deduction is worth to him when he is deciding whether the cost of the loan is worth it. Not everyone itemizes deductions now even if they do have the mortgage interest deduction available. You only get the full value of the deduction if you would have itemized deductions even without the mortgage interest one - if the mortgage interest deduction just barely makes it worthwhile to itemize, its value to you is actually very little. So, getting a lower interest rate at the price of eliminating the deductibility of what you do pay would mean less confusion, less guesswork, less paperwork - what's not to like?
On your point:
This is true. The government has no business in the speech control business; there is no constitutional difference between a "press" and a church - should income from a "press" be free of income tax? Should lobbying the government to "redress a grievance" be tax deductible? Personally I do itemize church contributions, since it's legal and "everyone does it," but the constitutional principle is vapid. Just as wrong, perhaps, as McCain-Feingold - and that is saying something.The only compensation in Forbes' bill for loss of the charitable deduction was it was "a flat tax that's a tax cut." So I might have come out of it whole, or approximately so, rather than getting a tax break out of it. But it would be worth it, to have the government out of the speech business. Without the charitable deduction, the rationale for the government's regulating political speech in a church would vanish. Not necessarily the prudential argument against political speech by a pastor - but that is a separate issue from the freedom to do so as conscience might dictate.
How can a right you were born with be conditional? Not upon the manner of exercisiing it but upon whether you may exercise it at all.
Well it isn't in the legislation as written.
Of course they are. That’s because the IRS ban on churches speaking about political matters was pushed through Congress by Lyndon B. Johnson in 1954 (then Senator from Texas) as was the Voters Rights Act (he was President by that time).
It amazes me how many people act as if the Founding Fathers thought that churches should be muzzled and/or silent on matters in the public arena. They did not.
The most amazing thing to me is that a church is not even required to file as a 501(c)(3) and subject themselves to such a limitation.
Churches basically sold their right to play in politics to get a tax exempt status. They agreed to that condition when they applied for 503(c) status. Nobody forced them to. They could have rejected tax exempt status and played in politics all they wanted.
“Well it isn’t in the legislation as written.”
Sure it is. HR25 has language about “charitable contributions” not being subject to FairTax. That means a church would still need to file for their tax-exempt status, otherwise any money they take in must have FairTax remittted. You can bet that if they chose tax exempt status under the income tax, they’ll do the same under the FairTax. Once they have chosen to be tax exempt, every other organization — TV, newspapers, blogs, etc. — that has to pay FairTax on the money they collect as they offer a platform to discuss politics is going to scream bloody murder if churches can do the same thing tax-free. Just as today, the churches will accept restrictions on their activities in exchange for donations being tax-free. They’ll figure that donors paying a tax will be a disincentive to give, just as eliminating the charitable deduction would reduce giving. Whether it actually would or not is debatable, but churches would likely play it safe and stick with the tax-exempt donation scheme.
`(a) NOT-FOR-PROFIT ORGANIZATIONS- Dues, contributions, and similar payments to qualified not-for-profit organizations shall not be considered gross payments for taxable property or services for purposes of this subtitle.
Exactly. “... qualified not-for-profit organizations ...” means a church must apply and be approved before they actually “qualify” as “not-for-profit” and that is where the argument about what activities they can engage in and still retain their “not-for-profit” status will pop up. That is the same test that applies today and allows people to donate and take a tax deduction. If they fail that test, then your donation is no longer tax deductible. That is the crux of this article — people who object to churches playing politics want them to lose their special status so that their donors lose their tax deduction. They will make the same arguments under the FairTax and claim the churches’ political activities mean they do not “qualify” as “not-for-profit” organizations.
I don’t think you’re right. If donations can become taxable under the rule then education expenses can also. The whole idea is to get politics out of the tax code.
When you donate money to organizations like FairTax.org or a political campaign, is your donation tax deductible ? No, it isn’t. Why ? Because even though they are a “not-for-profit” organization, they do not stay out of politics.
I have seen nothing to indicate that this will change under the Fair Tax — meaning that FairTax.org, political campaigns, and others that are CURRENTLY not qualifying for tax-deductible status on their donations will instead have to remit 23% of their donations to the government. If this was not true, then ANY business could say that they weren’t “selling” their goods or services, but simply accepting a donation. I could go and make a “gift” to the local Chevy dealer and he could make a “gift” of a car to me — and no FairTax would get collected. Obviously, there are going to be some rules on what is a “gift” and what isn’t, and those rules are going to result in the same treatment of churches vs. political non-profits vs. regular businesses as we have today. The upshot is that churches are going to have the same choice they have now — stay out of politics and donations are tax-exempt, or be political and donations are taxable.
A flat income tax, on the other hand, which has no deductions at all, WOULD allow churches to express political views because their donors would not be getting a tax break.
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