The Commission on Accountability and Policy for Religious Organizations was formed in 2011 to advise Senator Grassley on a number of current federal tax laws affecting religious organization in the US. Last week, the Commission submitted a 60-page report proposing recommended changes to the law prohibiting Section 501(c)(3) organizations from intervening in political campaign activity.
The Report’s most incisive remarks came in an introductory message from the Commission’s Chairman, Michael Batts of Batts, Morrison, Wales & Lee.
No freedoms are more central to the American experience than the freedom of speech and the freedom to exercise religion. To ensure that we are all reminded of those most fundamental freedoms, the American people enshrined them at the top of the Bill of Rights- - the First Amendment to the Constitution of the United States of America.
In light of our knowledge of and rights to such freedoms, it is both disturbing and chilling that the federal government regulates the speech of religious organizations and other organizations dedicated to improving the lives of people. As Americans, we know this instinctively. Yet, since 1954, federal tax law has included a provision that, as currently interpreted and applied, does exactly that. The prohibition against participation or intervention in a political campaign included in Section 501 (c)(3) of the Internal Revenue Code prohibits communications that involve support of or opposition to candidates for political office by religious and other 501(c)(3) organizations. It is the only law of its type on the books…the only law that allows the Internal Revenue Service to evaluate the content of a sermon delivered by a member of the clergy…the only law that could cause a church to lose its federal tax exemption based on the words spoken by its leaders in a worship service. Federal government officials also know instinctively that the law, as currently interpreted and applied, is problematic—which is why the law is largely unenforced in some respects and inconsistently enforced in others.
The Report recommended several changes to the current law, the most significant of which is to modify the law so that clergy can say whatever they believe is appropriate in the context of their religious services or their other regular religious activities without fear of IRS reprisal—even when such communication includes content related to political candidates. “Such communications would be permissible provided that the organization does not expend incremental funds in making them. In other words, as long as the organization’s costs would be the same with or without a political communication, the communication would be permissible.”
Following the publication of the Report, many groups published responses that sharply criticized and, at times, slammed the Report’s recommendations. I was interested to review the criticisms because the legal justifications supporting the ban have been seldom communicated. (The legislative record of the then-Senator Lyndon Johnson’s amendment is about eight sentences long.)
Critics of the Report generally countered that the law should not be changed, it should be enforced and that lifting the ban would open up a Pandora’s Box of other harmful changes. One group wrote:
The past several years have been a challenging time for many religious organizations and other 501(c)(3) organizations. Tensions have threatened to divide denominations, individual churches, synagogues, mosques, and temples, as well as religious organizations and their local affiliates on core issues of fundamental principle, such as the role of women and of the LGBT community (among an array of other theological and liturgical tensions). As well, tensions exist over the social justice positions that our houses of worship and our denominations take. (This is a bit less true with other “cause” 501(c)(3)s, since membership organizations attract members who join precisely because they share its positions, while our houses of worship tend to attract more diverse constituencies). The last thing America or our churches, denominations, and charities need is to divide our communities along political lines, which will significantly exacerbate these concerns. The prospect of “Romney” churches and “Obama” churches, of “Republican” denominations and “Democratic” denominations, and of “charities” divided along partisan lines unrelated to their core mission, would be a terrible loss to the commonwealth of our nation and to the spirit of comity, tolerance and unity so needed in our houses of worship and the charitable sector.
This legal reasoning is scary and is eerily similar to the logic used in passing the unconstitutional Alien and Sedition Acts of 1798, which prohibited anyone to “write, print, utter, or publish . . . any false, scandalous and malicious writing” against the government. As one Federalist in Congress declared, there was no need to "invite hordes of Wild Irishmen, nor the turbulent and disorderly of all the world, to come here with a basic view to distract our tranquility." Further, the idea that lifting the ban will distract Section 501(c)(3) organizations from their “core mission” is ironic because this same line of reasoning has been one of the strongest reasons for lifting the ban in the first place. Specifically, requiring the IRS to regulate nonprofits engaging in impermissible political campaign activity distracts the IRS from its core mission: to collect revenue for our government. For years, IRS agents have expressed frustration with the law because it requires the Agency to expend considerable staff and resources to audit and seldom results in any new tax revenue. As one agent put it, it makes much more sense to spend our energy on employment tax audits that actually result in new tax revenue.