romeshomey
01-03-2008, 08:31 AM
This was an interesting article on Newsmax.
DES MOINES, Iowa -- Iowa pastors who support Republican Mike Huckabee for president have received letters warning them that getting involved in politics could endanger the tax-exempt status of their churches.
Rest of the article below.
http://www.newsmax.com/politics/huckabee_letters/2008/01/02/61273.html
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Ironically, the letters may be correct.
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The Rights of Churches and Political Involvement © 2006 The Rutherford Institute
Since the passage of the Sixteenth Amendment of the United States Constitution, which authorized Congress to impose a federal income tax, Congress has consistently granted churches and religious organizations special exemptions from paying taxes and for receiving tax-deductible contributions.
However, if a church or religious organization wishes to qualify for and maintain this tax-exempt status, it must abide by the restrictions on political and legislative activities established in section
501(c)(3) of the Internal Revenue Code of 1986 (as amended). Section 501(c)(3) includes two stipulations: first, no substantial part of the organization's activities may consist of carrying on propaganda or otherwise attempting to influence legislation; and second, the organization may not participate in political campaigning in opposition to, or on behalf of, any candidate for public office.
In light of how the Internal Revenue Service (IRS) and some courts have interpreted section
501(c)(3) [see discussion below], churches and religious organizations may well consider this law as yet another example of the government's subordination of the rights of religious persons to "matters of national public policy" or to other rights.5Understanding section 501(c)(3), however, is necessary for any church that wishes to positively impact the moral and social fabric of our culture. A church
must decide whether it can be a viable and influential force in society within the constraints of section 501(c)(3) or whether it should forego the benefits of tax-exemption in order to participate unreservedly in the legislative and political process. Legislative Activities Defining A "Substantial" Part
Section 501(c)(3) states that a church or religious organization which engages in "substantial" legislative activities jeopardizes its tax-exempt status. The IRS interprets "legislative activities" as
attempts to influence legislation by participation in lobbying for the purpose of proposing, supporting, or opposing federal, state, or local legislation; or advocating the adoption or rejection of legislation.6
The IRS states that its determination of whether an organization's legislative activities constitute a "substantial" part of its overall activities depends on "all the pertinent facts and circumstances in
each case."7It gives "[c]onsideration . . . to a variety of factors including the time devoted by the organization to the activity (by both compensated and volunteer workers), assets devoted to the activity (such as office space, machinery, etc.), as well as expenditures."8
To make this determination more precise, one federal court proposed a rule of thumb that an
expenditure of less than five percent of a tax-exempt organization's time and effort in attempting to influence legislation does not constitute "substantial legislative activities."9Many tax-exempt organizations now widely regard the five percent rule as a benchmark of permissible legislative
activity.10Recently, however, the IRS administrative manual noted: [The five percent rule] provides but limited guidance because the court's view as to what sort of activities were to be measured is no longer supported by the weight of precedent.
http://www.rutherford.org/PDF/rightsofchurches.pdf
DES MOINES, Iowa -- Iowa pastors who support Republican Mike Huckabee for president have received letters warning them that getting involved in politics could endanger the tax-exempt status of their churches.
Rest of the article below.
http://www.newsmax.com/politics/huckabee_letters/2008/01/02/61273.html
---------------
Ironically, the letters may be correct.
---------------
The Rights of Churches and Political Involvement © 2006 The Rutherford Institute
Since the passage of the Sixteenth Amendment of the United States Constitution, which authorized Congress to impose a federal income tax, Congress has consistently granted churches and religious organizations special exemptions from paying taxes and for receiving tax-deductible contributions.
However, if a church or religious organization wishes to qualify for and maintain this tax-exempt status, it must abide by the restrictions on political and legislative activities established in section
501(c)(3) of the Internal Revenue Code of 1986 (as amended). Section 501(c)(3) includes two stipulations: first, no substantial part of the organization's activities may consist of carrying on propaganda or otherwise attempting to influence legislation; and second, the organization may not participate in political campaigning in opposition to, or on behalf of, any candidate for public office.
In light of how the Internal Revenue Service (IRS) and some courts have interpreted section
501(c)(3) [see discussion below], churches and religious organizations may well consider this law as yet another example of the government's subordination of the rights of religious persons to "matters of national public policy" or to other rights.5Understanding section 501(c)(3), however, is necessary for any church that wishes to positively impact the moral and social fabric of our culture. A church
must decide whether it can be a viable and influential force in society within the constraints of section 501(c)(3) or whether it should forego the benefits of tax-exemption in order to participate unreservedly in the legislative and political process. Legislative Activities Defining A "Substantial" Part
Section 501(c)(3) states that a church or religious organization which engages in "substantial" legislative activities jeopardizes its tax-exempt status. The IRS interprets "legislative activities" as
attempts to influence legislation by participation in lobbying for the purpose of proposing, supporting, or opposing federal, state, or local legislation; or advocating the adoption or rejection of legislation.6
The IRS states that its determination of whether an organization's legislative activities constitute a "substantial" part of its overall activities depends on "all the pertinent facts and circumstances in
each case."7It gives "[c]onsideration . . . to a variety of factors including the time devoted by the organization to the activity (by both compensated and volunteer workers), assets devoted to the activity (such as office space, machinery, etc.), as well as expenditures."8
To make this determination more precise, one federal court proposed a rule of thumb that an
expenditure of less than five percent of a tax-exempt organization's time and effort in attempting to influence legislation does not constitute "substantial legislative activities."9Many tax-exempt organizations now widely regard the five percent rule as a benchmark of permissible legislative
activity.10Recently, however, the IRS administrative manual noted: [The five percent rule] provides but limited guidance because the court's view as to what sort of activities were to be measured is no longer supported by the weight of precedent.
http://www.rutherford.org/PDF/rightsofchurches.pdf