Catholic Conference argued against this legislation. Leaders like Ernest Wilkinson, the president of Brigham Young University, and the U.S.
The House’s bill galvanized the religious community, which lobbied the Senate. That year, the House of Representatives passed a bill that would have eliminated the filing exception for all religious organizations. That changed in 1943, when Congress decided to make all of these groups except the religious ones – whether or not they function as churches – file of annual tax returns.īy 1969, in the wake of the discovery of a number of organizations abusing their tax exemptions, Congress had begun to feel like the government needed more information. By contrast, it must make all 990 forms part of the public record.Īs I explained in Dialogue: A Journal of Mormon Thought, an academic publication, no tax-exempt organization had to file any documentation with the IRS for the first 30 years following the modern federal income tax’s inception in 1913. Tax-exempt groups also must share select financial information, including the value of their assets, their expenditures and their revenue.Īs you may know, the IRS can’t violate your privacy by releasing your tax return. It requires disclosing some information, including who sits on its board of directors and the highest-paid employees. These organizations face obligations to maintain their exemptions, such as filing special paperwork with the IRS every year known as a Form 990. While groups must be organized as nonprofits to qualify for the federal tax exemption, not every nonprofit is exempt.Įligibility requires pursuing a specific purpose, such as religion, education or charity. Second, some of their donors can deduct their donations from their taxable income through the charitable deduction, creating an incentive to support those groups. First, these approximately 1.5 million groups – including everything from familiar nonprofits like the Red Cross to National Public Radio to the lesser-known First Church of Cannabis and the Satanic Temple – generally don’t have to pay taxes on their income. It provides two benefits to organizations that meet its requirements for tax exemption. To see why I’m worried, here’s some background about what’s probably the best-known section of the U.S. Even so, I’m concerned that groups taking this step are reducing the flow of valuable information about these organizations to the public. While reasons for this growing trend vary, these groups may share one main goal: keeping their donor lists private to protect their donors from public criticism or backlash.Īs a professor who studies how tax laws affect churches and other tax-exempt organizations, I believe these groups overestimate the benefits their donors will receive if the groups are treated as churches. Why would an already tax-exempt religious group want the government to treat it as a church? Because the rules governing churches are less strict. And yet, for tax purposes, Gideons claims to be a church. In fact, Gideons International – an association of businessmen and their wives who leave Bibles in hotel rooms – says on its website that it is neither a denomination nor a church. In spite of being registered with the IRS as “churches,” these organizations and others like them don’t claim to be churches publicly.
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