Posted on 12/26/2001 5:11:12 PM PST by The Mayor
A growing number of pastors have become fearful of speaking in their churches about government, legislation or politics. Most pastors do not know the laws about what they can and cannot do in their church or pulpit. The current, Internal Revenue Service (IRS) law is vague in some areas concerning this. The Federal government is attempting to clarify this confusion.
The current IRS law classifies churches as 501(c)3, nonprofit organizations. A 501(c)3 classification grants churches their tax exempt status and permits those making contributions to the church, and not receiving goods or services or benefits from their contribution, to deduct their contribution when calculating their federal and state income taxes.
The confusion about what churches can and cannot do, without violating their tax exempt status dates back to 1954. Senator Lyndon Johnson inserted the political ban in Section 501(c)3 of the IRS code in a floor amendment to the revenue act of 1954. No one held hearings or developed Congressional records for the need for this ban.
In the IRS codes relating to 501(c)3 organizations it states, "No substantial part of activities consisting of carrying on propaganda or otherwise attempting to influence legislation". Note that this does not forbid churches or other 501(c)3 organizations from activities of carrying on propaganda or otherwise attempting to influence legislation. It states that a church may not expend a substantial part of a church's activities to do these things. The church can promote propaganda or attempt to influence legislation, to some degree. The confusion comes because the law does not explain how much activity the church can contribute to these two things.
The IRS code specificlly states that the church cannot endorse or oppose a political candidate. They cannot contribute money to a candidate nor endorse a political party. The IRS code very clearly defines these limits. In the past, a pastor could state from the pulpit which candidate he was supporting, as long as he clarified that it was his position, not the church position.
A few years back an IRS ruling determined that a pastor could no longer state his position, even though he made it clear that it was his personal position and not the church's. Current interpretation is that pastors cannot use the pulpit to voice support or opposition of candidates.
In reviewing IRS tax court cases, one must come to the conclusion that it is safe for a church to spend up to 10% of their annual resources on legislative activity. This is not political activity. This will not exceed the "substantial amount" established by the IRS. If a church spends 10 to 15% of their annual resources on legislative activity, they will probably subject themselves to an IRS audit or review. At somewhere around 20%, the IRS will state that the church has exceeded the "substantial amount" classification. I personally do not know of any church that gives even 1% of their budget to legislative activity. Churches should have no concern about taking a position on legislative issues that will affect them or about lobbying for those issues, as long as they do not get near the 20% mark.
There is another section of the 501(c)3 IRS code which non-profit organizations, such as New Yorkers Family Research Foundation (NYFRF), may opt for an (H) option. This is not available to churches. Under the (H) option the organization has the same tax status as a church, but can clearly spend up to 20% of it's annual resources for lobbying activity-not political activity or campaigning.
Congressman Phil Crane of Illonois introduced the Bright Line Act of 2001, to clarify the confusion regarding 501(c)3 status. The purpose of this bill is to clearly define what churches can and cannot do in the area of lobbying and political (campaign) activity. Congressman Crane agrees that various pieces of legislation and candidates in public office certainly affect churches. He beleives churches should have an impact on legislation that will apply to them and on elected officals who will make those decisions. Other Corporations can and do spend money campaigning and lobbying on matters that relate to their businesses.
Congressman Cranes legislation says that a church will get the (H) option that is already available to other non-profit organizations. It eliminates the substantiality test. The bill specifically states that a church may not make lobbying expenditures in excess of an amount equal to 20% of their gross revenue, in any particular year. The bill futher states that a church may devote up to 5% of it's gross revenues on behalf of, or in opposition to, any political campaign or candidate for public office. The bill also states that the aggregate limit of grassroots lobbying and campaigning cannot exceed 20% of the churches gross revenues in any year.
Under this bill a church can spend %5 of it's annual revenue in a given year on campaign related activities and 15% on lobbying activities. Alternatively, the church can spend all 20% on lobbying and nothing on campaigns.
Congressman Cranes bill is HR2931. Mr Crane introduced the bill and is currently seeking co-sponsors for the legislation. You should contact your congressperson and ask them to co-sponsor Mr Cranes bill. There is the possibility that congress will act on this legislation before the end of 2001.
Congressman Jones of North Carolina introduced another bill that is that is similar to Mr Cranes. This legislation, HR 2357 is entitled "Houses of Worship Political Speech Protection Act".
This very brief bill states, "No substantial part of the activities of which is participating in, or intervening in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office." The bill does not define what "substantial part of the activities" means. This leaves churches with the same confusion as the current law. The only improvement is that this legislation does not prohibit lobbying or campaigning activities.
A church can be involved in the publishing and distribution of statements, and in the political campaign of a candidate for public office as long as the contribution is not a substantial part of the church's activities. This bill does not clearly define the amount of lobbying activity that the bill allows churches, nor does it give an amount of political campaigning a church can do, other than to say "not a substantial part" which is not defined.
HR 2357 may cause more pastors to do less than they do now, for fear of violating the IRS codes. It provides no clear distinction as to what a church can and cannot do. Most religious leaders and legal minds that deal with religious freedoms favor HR 2931, the Crane bill.
If you truly believe this, tell your church not to seek or accept tax-exempt status. Then I will believe you are operating from an "ethical" stance. Until then, I will believe churches that want a tax-exempt status AND to participate in the political process....simply want it both ways.....a hypocritical stance to say the least.
---max
I don't think the majority of the churches are sucking off the teat, as you say. The only real advantage of this is for the person making th donation, they can deduct their donation from their taxes.
I think this is the main part of the article. If this gets passed then it would be a fair playing field for all candidates, the demonrats wouldn't have the upper hand. It makes me sick that HiTlery, Gore and Bill Klinkton get away with it as often as they do...
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