An Historical and Constitutional Analysis of Why Section 501(C)(3) Does not Apply to Churches
Morse Code, Da Vinci Code, Tax Code and . . . Churches: An Historical and Constitutional Analysis of Why Section 501(C)(3) Does not Apply to Churches
Jennifer M. Smith, 23 J.L. & Pol. 41 (2007)
This article is about the United States federal tax code and churches. In particular, it discusses the interplay between section 501(c)(3) and churches in America. Section II presents a background of the history of the tax exemption for churches and the judicial holdings relative to that exemption. Section III explores the historical development of the separation between church and state, tax exemptions, and section 501(c)(3). Section IV analyzes section 501(c)(3) under the Constitution’s free speech and religion clauses. Section V proposes a recommendation, and Section VI is the conclusion.
This article recommends that the government, the courts and the IRS totally exclude churches from the political activity restrictions in section 501(c)(3). That is, leave churches alone. Do not tax them, do not regulate the content of their sermons and do not otherwise infringe upon their constitutional liberties of free speech and religion in any other way. Why? Although this article will explore various reasons and rationales for its recommendation that churches be left alone–constitutionally-based, policy-oriented and common sense-driven–the simplest answer is that the political activity restrictions in section 501(c)(3) were never intended for churches in the first place, and as a result, their application to churches ignores history and treads upon churches’ constitutional liberties.