Extracted from case
Branch Ministries v. Rossotti, KTC 2000-225 (D.C.Cir. 2000)
B. First Amendment Claims and the RFRA
The Church claims that the revocation of its exemption violated its right to freely exercise its religion under both the First Amendment and the RFRA. To sustain its claim under either the Constitution or the statute, the Church must first establish that its free exercise right has been substantially burdened. See Jimmy Swaggart Ministries v. Board of Equalization, 493 U.S. 378, 384-85 (1990) ("Our cases have established that the free exercise inquiry asks whether government has placed a substantial burden on the observation of a central religious belief or practice and, if so, whether a compelling governmental interest justifies the burden.") (internal quotation marks and brackets omitted); 42 U.S.C. section 2000bb-1(a), (b) ("Government shall not substantially burden a person's exercise of religion" in the absence of a compelling government interest that is furthered by the least restrictive means.). We conclude that the Church has failed to meet this test.
The Church asserts, first, that a revocation would threaten its existence. See Affidavit of Dan Little dated July 31, 1995 at p 22, reprinted in App. at Tab 8 ("The Church at Pierce Creek will have to close due to the revocation of its tax exempt status, and the inability of congregants to deduct their contributions from their taxes."). The Church maintains that a loss of its tax-exempt status will not only make its members reluctant to contribute the funds essential to its survival, but may obligate the Church itself to pay taxes.
The Church appears to assume that the withdrawal of a conditional privilege for failure to meet the condition is in itself an unconstitutional burden on its free exercise right. This is true, however, only if the receipt of the privilege (in this case the tax exemption) is conditioned
upon conduct proscribed by a religious faith, or . . . denie[d] . . . because of conduct mandated by religious belief, thereby putting substantial pressure on an adherent to modify his behavior and to violate his beliefs.
Jimmy Swaggart Ministries, 493 U.S. at 391-92 (internal quotation marks and citation omitted). Although its advertisements reflected its religious convictions on certain questions of morality, the Church does not maintain that a withdrawal from electoral politics would violate its beliefs. The sole effect of the loss of the tax exemption will be to decrease the amount of money available to the Church for its religious practices. The Supreme Court has declared, however, that such a burden "is not constitutionally significant." Id. at 391; see also Hernandez v. Commissioner, 490 U.S. 680, 700 (1989) (the "contention that an incrementally larger tax burden interferes with [ ] religious activities . . . knows no limitation").
In actual fact, even this burden is overstated. Because of the unique treatment churches receive under the Internal Revenue Code, the impact of the revocation is likely to be more symbolic than substantial. As the IRS confirmed at oral argument, if the Church does not intervene in future political campaigns, it may hold itself out as a 501(c)(3) organization and receive all the benefits of that status. All that will have been lost, in that event, is the advance assurance of deductibility in the event a donor should be audited. See 26 U.S.C. section 508(c)(1)(A); Rev. Proc. 82-39 section 2.03. Contributions will remain tax deductible as long as donors are able to establish that the Church meets the requirements of section 501(c)(3).
Nor does the revocation necessarily make the Church liable for the payment of taxes. As the IRS explicitly represented in its brief and reiterated at oral argument, the revocation of the exemption does not convert bona fide donations into income taxable to the Church. See 26 U.S.C. section 102 ("Gross income does not include the value of property acquired by gift. . . ."). Furthermore, we know of no authority, and counsel provided none, to prevent the Church from reapplying for a prospective determination of its tax-exempt status and regaining the advance assurance of deductibility -- provided, of course, that it renounces future involvement in political campaigns.
We also reject the Church's argument that it is substantially burdened because it has no alternate means by which to communicate its sentiments about candidates for public office. In Regan v. Taxation With Representation, 461 U.S. 540, 552-53 (1983) (Blackmun, J., concurring), three members of the Supreme Court stated that the availability of such an alternate means of communication is essential to the constitutionality of section 501(c)(3)'s restrictions on lobbying. The Court subsequently confirmed that this was an accurate description of its holding. See FCC v. League of Women Voters, 468 U.S. 364, 400 (1984). In Regan, the concurring justices noted that "TWR may use its present section 501(c)(3) organization for its nonlobbying activities and may create a section 501(c)(4) affiliate to pursue its charitable goals through lobbying." 461 U.S. at 552.
The Church has such an avenue available to it. As was the case with TWR, the Church may form a related organization under section 501(c)(4) of the Code. See 26 U.S.C. section 501(c)(4) (tax exemption for "[c]ivic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare"). Such organizations are exempt from taxation; but unlike their section 501(c)(3) counterparts, contributions to them are not deductible. See 26 U.S.C. section 170(c); see also Regan, 461 U.S. at 543, 552-53. Although a section 501(c)(4) organization is also subject to the ban on intervening in political campaigns, see 26 C.F.R. section 1.501(c)(4)-1(a)(2)(ii) (1999), it may form a political action committee ("PAC") that would be free to participate in political campaigns. Id. section 1.527-6(f), (g) ("[A]n organization described in section 501(c) that is exempt from taxation under section 501(a) may, [if it is not a section 501(c)(3) organization], establish and maintain such a separate segregated fund to receive contributions and make expenditures in a political campaign.").
At oral argument, counsel for the Church doggedly maintained that there can be no "Church at Pierce Creek PAC." True, it may not itself create a PAC; but as we have pointed out, the Church can initiate a series of steps that will provide an alternate means of political communication that will satisfy the standards set by the concurring justices in Regan.
Should the Church proceed to do so, however, it must understand that the related 501(c)(4) organization must be separately incorporated; and it must maintain records that will demonstrate that tax-deductible contributions to the Church have not been used to support the political activities conducted by the 501(c)(4) organization's political action arm. See 26 U.S.C. section 527(f)(3); 26 C.F.R. section 1.527-6(e), (f).
That the Church cannot use its tax-free dollars to fund such a PAC unquestionably passes constitutional muster. The Supreme Court has consistently held that, absent invidious discrimination, "Congress has not violated [an organization's] First Amendment rights by declining to subsidize its First Amendment activities." Regan, 461 U.S. at 548; see also Cammarano v. United States, 358 U.S. 498, 513 (1959) ("Petitioners are not being denied a tax deduction because they engage in constitutionally protected activities, but are simply being required to pay for those activities entirely out of their own pockets, as everyone else engaging in similar activities is required to do under the provisions of the Internal Revenue Code.").
Because the Church has failed to demonstrate that its free exercise rights have been substantially burdened, we do not reach its arguments that section 501(c)(3) does not serve a compelling government interest or, if it is indeed compelling, that revocation of its tax exemption was not the least restrictive means of furthering that interest.
Nor does the Church succeed in its claim that the IRS has violated its First Amendment free speech rights by engaging in viewpoint discrimination. The restrictions imposed by section 501(c)(3) are viewpoint neutral; they prohibit intervention in favor of all candidates for public office by all taxexempt organizations, regardless of candidate, party, or viewpoint. Cf. Regan, 461 U.S. at 550-51 (upholding denial of tax deduction for lobbying activities, in spite of allowance of such deduction for veteran's groups).
C. Selective Prosecution (Fifth Amendment)
The Church alleges that the IRS violated the Equal Protection Clause of the Fifth Amendment by engaging in selective prosecution. In support of its claim, the Church has submitted several hundred pages of newspaper excerpts reporting political campaign activities in, or by the pastors of, other churches that have retained their tax-exempt status. These include reports of explicit endorsements of Democratic candidates by clergymen as well as many instances in which favored candidates have been invited to address congregations from the pulpit. The Church complains that despite this widespread and widely reported involvement by other churches in political campaigns, it is the only one to have ever had its tax-exempt status revoked for engaging in political activity. It attributes this alleged discrimination to the Service's political bias.
To establish selective prosecution, the Church must "prove that (1) [it] was singled out for prosecution from among others similarly situated and (2) that [the] prosecution was improperly motivated, i.e., based on race, religion or another arbitrary classification." United States v. Washington, 705 F.2d 489, 494 (D.C. Cir. 1983). This burden is a demanding one because "in the absence of clear evidence to the contrary, courts presume that [government prosecutors] have properly discharged their official duties." United States v. Armstrong, 517 U.S. 456, 464 (1996) (internal quotation marks and citation omitted).
At oral argument, counsel for the IRS conceded that if some of the church-sponsored political activities cited by the Church were accurately reported, they were in violation of section 501(c)(3) and could have resulted in the revocation of those churches' tax-exempt status. But even if the Service could have revoked their tax exemptions, the Church has failed to establish selective prosecution because it has failed to demonstrate that it was similarly situated to any of those other churches. None of the reported activities involved the placement of advertisements in newspapers with nationwide circulations opposing a candidate and soliciting tax deductible contributions to defray their cost. As we have stated,
[i]f . . . there was no one to whom defendant could be compared in order to resolve the question of (prosecutorial] selection, then it follows that defendant has failed to make out one of the elements of its case. Discrimination cannot exist in a vacuum; it can be found only in the unequal treatment of people in similar circumstances.
Attorney Gen. v. Irish People, Inc., 684 F.2d 928, 946 (D.C. Cir. 1982); see also United States v. Hastings, 126 F.3d 310, 315 (4th Cir. 1997) ("[D]efendants are similarly situated when their circumstances present no distinguishable legitimate prosecutorial factors that might justify making different prosecutorial decisions with respect to them.") (internal quotation marks and citation omitted).
Because the Church has failed to establish that it was singled out for prosecution from among others who were similarly situated, we need not examine whether the IRS was improperly motivated in undertaking this prosecution.
III. CONCLUSION
For the foregoing reasons, we find that the revocation of the Church's tax-exempt status neither violated the Constitution nor exceeded the IRS's statutory authority. The judgment of the district court is therefore
Affirmed.
I've already said that I don't care if the Chief Justice himself says otherwise.
You cannot take something intended for God, use it on yourself, and say you haven't curtailed the intent.
It's totally illogical.
The court is using "unburdened" to define "free." I am using "uncurtailed" to define free.
A spigot flowing freely is one that is unhindered, uncurtailed.
The court is also acting as if the right to "free expression" belongs only to the church body. It is an individual right.
My money IS worship of God. To take some of it is to take that which is SPECIFICALLY FOR the worship of God.
How, then, can it be free?
this doesn't make any sense. How can the court say that the rule didn't violate the freedom of speech when they are pointing to the rule that clearly is violating the freedom of speech?
That was the whole point of the freedom of speech clause that government can not make laws (rules) against the freedom of speech.
The lawyer was an idiot for letting that slide.