Tag Archives: tax-exempt status

When The Cancel Culture Meets The Internal Revenue Service

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Yesterday The Epoch Times posted an article about a recent decision by the Internal Revenue Service regarding the tax-exempt status of a religious organization.

The article reports:

An IRS official denied tax-exempt status to a Texas group that encourages church members to pray for state and national leaders, regardless of their party affiliation, because it benefits “the private interests of the [Republican] Party.”

“You do not qualify as an organization described in IRS Section 501(c)(3). You engage in prohibited political campaign intervention,” wrote Stephen A. Martin, director of the IRS Office of Exempt Organizations Rulings and Agreements, in a May 18 letter (pdf) to Christians Engaged, the Garland, Texas-based prayer group recognized by Texas officials as tax-exempt.

“You are also not operated exclusively for one or more exempt purposes within the meaning of Section 501 (c)(3), because you operate for a substantial non-exempt private purpose and for the private interests of the D party.”

The “D party” is a reference to the Republican Party, according to a novel “legend” that Martin provided at the top of his letter to the Texas group.

The article then explains:

Martin also noted that the group’s activities “educate believers on national issues that are central to their belief in the Bible as the inerrant Word of God.

“Specifically, you educate Christians on what the Bible says in areas where they can be instrumental, including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations,” he wrote.

“The Bible teachings are typically affiliated with the D party and candidates. This disqualifies you from exemption under IRS Section 501(c)(3).”

The D party in this case refers to the Republican party. This is a blatant attempt to keep Christian values (and those who hold them) out of the public discourse. It is a violation of the First Amendment rights of the group and should be treated as such.

The article includes the following:

First Liberty Institute is appealing Martin’s decision on behalf of Christians Engaged.

“The IRS states in an official letter that Biblical values are exclusively Republican. That might be news to President Joe Biden, who is often described as basing his political ideology on his religious beliefs,” First Liberty Institute counsel Lea Patterson said in the statement.

“Only a politicized IRS could see Americans who pray for their nation, vote in every election, and work to engage others in the political process as a threat. The IRS violated its own regulations in denying tax-exempt status because Christians Engaged teaches biblical values.”

The IRS believes that Biblical values are exclusively Republican. Wow. Considering the role that Biblical views played in the founding of our nation, that idea should send Americans to the polls to vote for Republicans. Stay tuned. I suspect we haven’t heard the last of this.

Freedom Is Under Attack

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The following is a Judicial Watch Press Release from January 29th:

Reminiscent of the Obama Internal Revenue Service’s (IRS) witch hunt of conservative groups, a U.S. Senator who sits on the committee that oversees the tax agency is pushing it to revoke a student charity’s nonprofit status. The veteran lawmaker, Rhode Island Democrat Sheldon Whitehouse, says the conservative student organization, Turning Point USA, should lose its nonprofit rating because it held large events that could help spread COVID-19. In a letter to IRS Commissioner Charles P. Rettig the senator describes the gatherings as “superspreader” events. He specifically mentions a Palm Beach, Florida winter gala at the Mar-a-Lago Club famously owned by former President Donald Trump.

“According to press reports and social media posts, many participants gathered and mingled indoors without wearing masks, in violation of Palm Beach County’s COVID-19 regulations,” Whitehouse, a member of the Senate Finance Committee, writes to the IRS chief. The powerful chamber has oversight over the IRS, among many other government agencies. “In holding these ‘superspreader’ events, Turning Point USA knowingly exposed hundreds of young people and staff working at the events to serious risk of infection,” the letter continues. The legislator asks the IRS to review whether the group, which has more than 250,000 student members, should continue to enjoy its tax-exempt nonprofit status. “Established law has long held that an organization is not eligible for tax exemption under section 501(c)(3) if a purpose of the organization is contrary to public policy or is illegal,” the letter states, reminding the IRS commissioner of a three-part test established to determine whether an organization’s activities are consistent with tax exemption under the code.

The analysis includes determining whether the purpose of the organization is charitable, if activities are not illegal and whether the activities are in furtherance to the group’s exempt purpose and are reasonably related to that purpose. “Turning Point USA’s reckless decision to host potential ‘superspreader’ events, in open violation of local COVID-19 regulations, put children and others at risk, and was clearly contrary to the public good,” the senator tells the IRS commissioner. “Tax-exempt status provides a substantial benefit to charitable organizations and reflects the federal government’s endorsement of an organization’s activities. Organizations that knowingly put in danger minors entrusted to their care should not enjoy the benefits of tax-exempt status. Accordingly, I urge the IRS to review whether it should revoke Turning Point USA’s tax-exempt status.”

Founded in 2012, Turning Point USA describes itself as a national student movement dedicated to identifying, organizing, and empowering young people to promote the principles of free markets and limited government. The group’s founder, 27-year-old Charlie Kirk, was the chairman of Students for Trump, which aimed to activate a million new college voters before the 2020 presidential election. In a press release announcing the letter to the IRS, Whitehouse refers to the group as a “right-wing nonprofit” that “promotes far-right ideas to young people around the country.” The document, posted on the senator’s official website, further states that Turning Point USA “has cultivated close ties to President Trump and the Trump family.”

The senator’s push to repeal the conservative charity’s nonprofit status brings back memories of the Obama IRS singling out groups with conservative-sounding terms such as “patriot” and “Tea Party” in their titles when applying for tax-exempt benefits. Judicial Watch launched an investigation and sued for records after an explosive Treasury Inspector General report revealed that in 2010 the IRS began using inappropriate criteria, such as lists of past and future donors, to identify organizations applying for tax-exempt status. The illegal IRS reviews continued for more than 18 months, according to the report, and “delayed processing of targeted groups’ applications” preparing for the 2012 presidential election. The IRS director at the center of the scheme, Lois Lerner, not only broke agency rules—as well as the law—to target conservative organizations she also lied to Congress to cover up the wrongdoing.

Please understand that under the Biden administration there is a real possibility that the government will be used to limit the rights of conservatives. This was done under the Obama administration, and many of the people in that administration are pulling the strings in the Biden administration. We are truly in danger of losing our freedoms.

How Is This Compatible With The First Amendment?

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Fox News posted an article today reporting some recent comments by Beto O’Rourke.

The article reports:

Democratic presidential hopeful Beto O’Rourke says he’d strip churches of tax-exempt status if they don’t support same-sex marriage.

When the former Texas congressman was asked if religious institutions — “colleges, churches, charities” — should be stripped of tax-exempt status Thursday night by CNN anchor Don Lemon during the LGBTQ town hall, he immediately responded, “Yes.”

The article continued:

“There can be no reward, no benefit, no tax break for anyone or any institution, any organization in America, that denies the full human rights and the full civil rights of every single one of us,” he said. “So as president, we’re going to make that a priority, and we are going to stop those who are infringing upon the human rights of our fellow Americans.”

First of all, the churches who hold a Biblical view of marriage are not restricting your human rights–they are simply saying that they do not support something that is against the teaching of the Bible. These are churches who believe in the Bible. The Bill of Rights gives them the right to those beliefs. You are perfectly free to get married in any church that has a different view of marriage, you are just not allowed to coerce a church to go against its basic tenets.

The article concludes:

And Hiram Sasser, general counsel for First Liberty Institute, told Fox News their faith-based organization has taken on the government before.

“When the Obama IRS came after pastors gathering together in conferences with Rick Perry support traditional marriage, we had to defend the pastors,” Sasser said. “We beat the IRS then and we would do it again if O’Rourke attacks churches with the IRS in the future.”

President Trump has championed religious liberty, largely winning the evangelical vote in 2016, and earlier this year, his administration launched a global effort to decriminalize homosexuality.

Be very careful here. Regardless of how you feel about this particular issue, please understand that this is an attempt to chip away at the rights guaranteed to Americans in the Bill of Rights.

We Need To Pay Attention To What The House Of Representatives Just Passed

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There was a time in the not-too-distant past when you could trust the running of the government to the people you elected and sent to Washington. They were paid to represent you; and as long as they didn’t wander too far off the main path, the system worked. Well, those days are gone. Legislation just passed in the House of Representatives has the potential to make you a criminal just for continuing on in the normalcy of your own private life.

Yesterday The Washington Times posted an article about some of the provisions of the Equality Act just passed by the House of Representatives. Among other things, women and girls would have to allow men claiming they were transitioning to women in their locker rooms and restrooms.

The article reports:

Far from merely expanding civil rights categories, it turns any recognition of the differences between the sexes or any preference for traditional sexual morality into actionable “hate,” creating fertile grounds for lawsuits.

“It is the most dangerous bill to freedom of speech and the free exercise of religion that has ever been proposed on a national level,” says Houston Baptist University Prof. Robert Gagnon, an expert in biblical sexual morality. “It will codify into law that you are a bigot, the moral equivalent of a racist, tantamount to being a member of the Klu Klux Klan, who must be shut out of society and, wherever possible, harassed and persecuted for your beliefs.”

In other words, it will criminalize Christianity, an ongoing process that got a big boost from the U.S. Supreme Court’s 2015 ruling on same-sex “marriage.”

This draconian bill passed by a vote of 236-173, with 8 Republicans joining 228 Democrats. Another 16 Republicans and 7 Democrats did not vote.

The U.S. Chamber of Commerce has actually endorsed it. When did destroying the moral order and paving the way for more lawsuits against businesses become part of the chamber’s mission? Pouring legal acid on a marriage-and-family-based culture will not lead to a more stable society of upwardly mobile consumers. America is only as prosperous as its families are strong.

The article concludes:

Unless we reassert the primacy of natural marriage and natural sexuality, “our battle will be a losing one,” Mr. Smirak writes. “Our churches will end up essentially illegal. Sooner or later.”

MassResistance, a parents-rights group, has compiled a list of likely outcomes. Here’s a tweaked version:

1. It will undermine the civil rights movement that black Americans fought for.

2. Churches will be sued or lose tax-exempt status if they don’t accept LGBTQ behaviors.

3. Schoolchildren will be forced to learn how to engage in destructive LGBTQ behaviors [in California, it begins in kindergarten].

4. Parents who oppose this will be charged with discrimination.

5. Private colleges will lose funding, grants and scholarships.

6. Public accommodations and small businesses will be forced to allow men into women’s bathrooms and vice versa.

7. Business owners will be forced to violate their freedom of conscience.

8. Hospitals, clinics and the armed forces will be forced to offer experimental and harmful transgender treatments — including surgeries.

9. Foster and adoption agencies will be forced to close, as has already happened to Catholic Charities in several liberal cities.

10. Men will displace women in sports events (already happening).

Scenarios like the following case would become common: A Texas father has been charged in a divorce proceeding with child abuse for not “affirming” his 6-year-old son as female. The mother renamed James as “Luna” and makes him wear dresses to school. The father says James is all boy when he visits him, and goes by “James.” The Equality Act would greatly enhance the mother’s insane quest to turn their son into a girl.

The mother also seeks to terminate the father’s visitations and to “require him to pay for the child’s visits to a transgender-affirming therapist and transgender medical alterations, which may include hormonal sterilization starting at age eight,” writes Walt Heyer, a former transsexual, in the Federalist.

Michelle Cretella, executive director of the American College of Pediatricians, describes the pediatric community’s encouragement of sex change and hormones for children as “institutionalized child abuse.”

The Equality Act would federalize such abuse, and religious faith won’t be a shield. Judges will see to that.

The bill is far more dangerous than most people know. It’s about time they knew — and told everyone they can, especially lawmakers.

This bill is the death knell for the family-based society that is America. If your Representative voted for it, please vote him or her out of office.

Why All Congressional Bills Need To Be Read Carefully

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CBN News reported today on an unnoticed item in the tax cut bill passed by Congress this year.

The article reports:

Churches and non-profit organizations are calling for the repeal of a provision in the GOP’s tax cuts law that would force ministries to file federal tax returns, and in some cases pay taxes.

Last winter, as lawmakers touted the tax savings in the Tax Cuts and Jobs Acts, no one mentioned this new federal tax on local churches. But for non-profits like Christian ministries, that little-known provision in the legislation has become a big cause for concern.

…Under the new tax plan, churches, hospitals, colleges and other historically tax-exempt groups must pay a 21 percent tax on some benefits they provide their employees, such as parking, transportation and other related benefits.

Dan Busby is president of the Evangelical Council for Financial Accountability. He says churches weren’t expecting to get hit with – of all things – an income tax bill, and this one could be a huge burden on groups that have historically enjoyed tax-exempt status.
 
“There are nearly 15 million employees that work in the United States for nonprofits – nearly 10 percent of the workforce – so that’s 15 million parking places. And conservatively, it’s going to cost the non-profit community as a whole up to a billion dollars,” Busby said.

That’s a lot of money for ministries that rely on donations. In response to the news, the ECFA put out a petition that churches and nonprofits can sign to protest the employee parking tax. 

“Tax practitioners who have evaluated Section 512(a) (7) generally believe that the result of this new provision is that tax‐exempt organizations that provide parking to their employees will be subject to unrelated business income tax on the cost of the parking provided. A nonprofit organization that simply allows its employees to park in a parking lot or garage that is part of the organization’s facilities will be subject to a tax on the cost of the parking provided,” the ECFA explained in a position statement available for download on its website.

This is the link to sign the petition against the new tax  –  https://www.ecfa.org/DocSig.aspx

Taxing churches on their staff parking places has to be one of the dumbest ideas I have ever encountered.

Filling A Bottomless Pit

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In January of this year, I posted an article entitled, “If You Give A Mouse A Cookie,” relating to a children’s book published in 2013. The basic story line of the book is that if you give a mouse a cookie he will expect milk and other things to go with it. That story had to do with a company in Wisconsin that discovered that whatever concessions you make to a special interest group, they will not be enough. This story has to do with the tax situation in Princeton, New Jersey.

MSM posted a story today about a discussion in Princeton, New Jersey, about whether or not Princeton University should be tax exempt.

The article states:

Free lectures, admission to athletic games and concerts, even shuttles to Trader Joe’s are some of the perks that neighbors of Princeton University get from New Jersey’s only Ivy League school.

A growing number of residents, though, resent the gestures. Riding a national wave of discontent with nonprofit institutions, they’re suing to challenge the tax-exempt status of Princeton, whose $22.7 billion endowment makes it the fourth-richest U.S. university. The outcome could cut homeowners’ annual property taxes, averaging $17,699, by a third. It also could end the freebies that make Princeton a cushy oasis while other New Jersey towns, burdened by high public-worker costs and flat state aid, struggle to maintain basic services.

There are a lot of questions that come to mind after reading this. What is the budget of Princeton, and has anyone considered cutting the budget?

The article further reports:

The university pays its hometown about $8 million in annual levies toward a proposed $61.9 million municipal budget. It kicks in another $3 million voluntarily, a boost for emergency services and public works. The rest, the freebies, make for what the school calls positive town-and-gown relations.

So the tax-exempt University already pays more than 10 percent of the municipal budget, and now the city wants to take away its tax-exempt status. It’s interesting to me that the article cites the worth of the University to support its argument. This is classic redistribution of wealth. Princeton has acquired its wealth honestly. It belongs to Princeton. Now the municipality is trying to figure a way to take what has been rightfully earned away from the entity that earned it and give it to the city, which hasn’t earned it. Maybe it’s time that the City of Princeton redid its budget rather than resorting to legal theft.

Sometimes The Wheels Of Justice Turn Very Slowly

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Scott Johnson at Power Line blog posted a story today about an investigation into the use of the Internal Revenue Service (IRS) as a political tool that had been held up, but will now be moving forward.

The article reports:

The pro-Israel group Z Street had its application for tax-exempt status held up at the IRS. When founder Lori Lowenthal Marcus asked why, she was told that IRS auditors had been instructed to give pro-Israel groups special attention and that Z Street’s application had been forwarded to a special IRS unit for additional review. Not to put too fine a point on the legal issues, this isn’t kosher. It’s illegal.

Z Street filed a lawsuit against the IRS in the rosy dawn of the Age of Obama; the lawsuit has failed to get beyond the IRS’s motion for dismissal. The Free Beacon’s Alana Goodman wrote about the lawsuit here last year when the DC District Court denied the IRS motion to dismiss the case. Z Street’s Lori Marcus wrote about it here. John wrote about it in 2013 in the post “The other IRS scandal.”

The DC Circuit Court handed down its decision today. The case will move forward–the IRS motion was denied. The decision is posted here.

The article at Power Line includes the following statement by Z Street:

Z STREET looks forward to the discovery phase of litigation in which it will seek to learn the nature and origin of the “Israel Special Policy” which the IRS applied to Z STREET’s tax exemption application. Z STREET will seek to learn how such a policy was created, who created it, who approved it, to whom it was applied, as well as all other information regarding this policy.

A series of IRS documents called “Be On the LookOut” lists, which were released by Congress in June, 2013, pursuant to the TIGTA investigation, have already established that, as Z STREET alleges, while Z STREET’s application for tax exempt status was pending, the IRS did indeed create a special category of review for organizations seeking such status, if they were engaged in what the IRS called “occupied territory advocacy.”

Z STREET looks forward to using the discovery process to learn more about the precise nature, origin and effect of this policy, which the DC Circuit has now made clear is a violation of essential Constitutional rights.

Under the Obama Administration, the federal government has been staffed with bullies. Unless we learn how to stand up to these bullies and get them under control, we will lose the freedoms that we have taken for granted.