Is Mormon Church involvement in Yes on 8 violating tax-exempt statutes?

Aren’t there laws against religions becoming directly involved in political activities? The Mormon Church has raised $10 million for Yes on 8, has pressured members to phone bank and donate, and the campaign has threatened businesses that donated to No on 8. Now they’ve been – uh – outed, they are backing down. Guess they didn’t expect to get so much unwanted publicity.

Well heck, let’s give them lots more. Let’s see if the Mormon Church has violated tax-exempt statutes by being so directly involved. And if so, then yank their non-profit (and tax-free) status.

From the IRS on the tax exempt status of organizations, emphasis added.

Section 501(c)(3) describes corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literacy, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in section (h)), and which does not participate in, or intervene in (including the publishing or distribution of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

IRS Publication 1828 page 5

Substantial Lobbying Activity
In general, no organization, including a church, may qualify for IRC section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). An IRC section 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.

No on Prop. 8. Get involved now.

Update: As for who specifically could sue, Sue asks Could gay couples sue IRS over LDS’ Yes on Prop 8 activities?

  • catdance

    It is past time for the tax exemption to be taken away from all churches. I think that, following the election, that will be the main focus of my activism.
    I realize there are churches that are not involved in the political arena, but those who are have poisoned the well by making Republican synonymous with Faith.

  • kevkev

    The Mormon Church is also behind
    Prop. 102 in Arizona!

    The Mormons are a Billion Dollar Business!
    Tax ’em!

  • Non-Delusional Bob

    When a religion is good, I conceive it will support itself; and when it does not support itself, and God does not take care to support it so that its professors are obligated to call for help of the civil power, it’s a sign, I apprehend, of its being a bad one.

    — Benjamin Franklin

    While I am a Non-Delusionist I agree with Ben on this one.

  • jrldev

    All churches are involved in political activities. The Catholic and Mormons are not alone in backing with money and doctrinal pressure their members to suport the church directive in political positions. Being to two richest groups they attract the most news attention.
    ALL religious groups – regardless of theological beliefs -should be taxed like the business they are.
    Religion is not different than a political party. Every group claims they are the “right answer” to every problem encountered in our society.

  • DMS

    Another point for taking tax-exempt status from churches is that many are effectively businesses for those at the helm. Many pastors live posh lifestyles on money from parishioners. If they’re going to use their churches that way, then the churches should be taxed as businesses.

  • sulphurdunn

    The Mormon church has always considered the laws of the United States and Zion’s compact with them to be a mere marriage of convenience.

  • Mark N.

    No money for the “yes on 8” campaign has come from the LDS Church itself. It has merely encouraged the membership to make individual donations of their time, money and talents.

    As a member of the LDS Church myself, I am thoroughly disappointed by the “blackmail” letter campaign. Their spin on the matter is completely unconvincing.

  • David

    Extortion is extortion. Yes on 8 staffers need to be investigated and charged with extortion as does everyone affiliated with the Yes on 8 campaign who had anything to do with those letters.

    I do not care how incredibly stupid we Americans have become about what we allow during elections, we need to draw the line at extortion and blackmail.

  • Marsha Thomas

    The following blog post regarding Churches & Religious Organizations and Political Campaign Activity sheds light on this issue:

  • Joe

    If I was in Ca I would vote No on prop 8. But a church (i am agnostic) may support issues not candidates and as the law states not significant amounts. I doubt LDS in comparison to what they rake in has breached that letter of the law.

  • jb3

    All churches are business, and as such, all of them should be taxed.

  • DJ

    “All churches are business…”

    Not true. The best of them (the ones that don’t make the news) merely strive to be self-supporting through their own contributions.

    Others, like the Mennonites, support goals that regular readers of this blog would most likely support. The Christian Peacemakers who got kidnapped (and at least one was killed) in Iraq were Mennonites who were providing logistical and strategic support for local Muslim peace groups. They were doing what most Americans who oppose the war are afraid to do: the work necessary to end it.

    While I oppose the LDS church’s involvement in this issue, I disagree with the attitude that since one dog bit me, all dogs should be shot.

  • you-cant-fool-me

    the LDS “church” DOES NOT donate their money to any outside charities. They “claim” that they do so they can remain tax-exempt.

    all that CASHOLA that rolls in each month is re-invested into their own corporations. (you can google a TIME MAGAZINE article on the mormon “church” — it’s not a church, it’s MASSIVE CORPORATION — a real eye-opening article).

    they own companies such as BENEFICIAL LIFE INSURANCE, AgRESERVES (the largest producer of nuts in the country), HAWAII RESERVES PROPERTIES, the own TONS of stock in COCA-COLA, etc etc. it’s big business folks, and none of that cash is going to ANY outside charities.

    it’s time for the IRS to investigate that organization.

  • DJ

    “none of that cash is going to ANY outside charities.”

    When there’s a natural disaster, the Mormons are one of the first on the scene. They don’t just send cash, they show up in a 747 loaded with supplies. So, while I don’t agree with all their activities, let’s be fair: they ARE generous to those in need.

  • And they don’t make a big deal about it. They just load up the planes with supplies and take off. This is indeed praiseworthy. They also genuinely take care of their own. That’s part of what the tithing is about. If a breadwinner dies or gets ill and can’t work, they will step in and help.

  • DJ

    And their canneries, while open for any member to buy foods (and non-members invited by a member), give food away free to the needy. Plus their thrift store, Deseret Industry, clothes a lot of people (both members and non-members, anyone can shop there) at ridiculously cheap prices.

    You may not like the Church’s politics (and I don’t), but they do play an important and positive role in the community.

  • Jacob

    I think the LDS church has asked it’s members to make a stand with these propositions because it is a moral issue, and it has implications of government taking the role that traditionally churches have taken in the past. The role of teaching morals to society.

    I give an example of the recent law allowing same sex marriage in MA. Children in Kindergarten are taught that same sex marriage is accepted and ok. They are given books to read about same sex relationships. The government is indoctrinating children to believe in an issue that is against the moral belief of a church.

    The School districts there won’t even notify parents when it is teaching about homosexual relationships because they state that it is legal in the state, thus it is acceptable to teach in school.

    If the government says that same sex marriage is acceptable, will it start requiring religions to do same sex marriages if they are requested? Can people sue a church because they “discriminate” against them when the law of the land states that it is ok?

    The passing of these moral issues puts in danger the separation between church and state. I don’t want the state teaching my children what is morally acceptable. I reserve the right to teach my children about morals.

  • DJ

    I wonder if the same discussions took place when the Supreme Court outlawed desegregation. In some places and among some people, that too was a moral issue (and among a small minority, it still is).

  • adam

    you silly fools, the church didnt donate any money and doesnt recieve money from the state. members of the church donated to the cause. The church doesnt receive state funding so therefore it is a seperate entity and a great one at that. only 5% of the yes votes came from mormons.. what are you saying that the funding by members swayed the vote.. excuse me if it had to do with funding the no on 8 campaign had more momey generated by the millions. its not about money, its about what the people voted for. and id say you should be pointing fingers at the 47% of californians who voted for this amendment that are not mormom. so what are you saying that the mormons have that much sway in society? I dont think so. this is a society moral issue and at least almost half of our society still has some moral value left.

  • Andrew

    To Jacob:

    Unlike Massachussettes, California law gives parents absolute control over their child’s education. The Mass. example is irrelevant.

    In fact, when that class went to the wedding reception of the their teacher, two parents exercised their constitutional right and kept their kids home.

    Seems to me you have nothing to worry about here in California.

    Maybe you should have checked the “facts” the Yes on 8 side was presenting.

  • DJ

    Adam: The Church set up phone banks here in Utah to call California voters and drum up support for Prop 8. Plus it encouraged its members to donate– and Mormons were the single largest source of pro Prop 8 money.

    There was a protest yesterday in SLC in which 2,000 Mormons protested that their tithes had been used for political purposes– and to promote an issue on which many Mormons think the Church is just plain wrong. I don’t blame them a bit.

  • DT

    There is no violation of the tax exempt status when the organization comments on an issue. The ban is against supporting or opposing candidates.

    From the IRS website “Therefore, the fundamental test that the Service uses to decide whether an IRC 501(c)(3) organization has engaged in political campaign intervention while advocating an issue is whether support for or opposition to a candidate is mentioned or indicated by a particular label used as a stand-in for a candidate. Accordingly, the appropriate focus is on whether the organization, in fact, is commenting on a candidate rather than speaking about an issue.”

  • op

    let’s put this on the2009 ballot , take away all tax exemption from all religious temples& churches.

  • DT

    You might have Constitutional problems with singling out religious institutions. You would have to tax all organizations including colleges and universities, environmental groups and a lot of others with whom you agree. The fact that churches fight for their beliefs is no different that other non-profits fighting for theirs. So you really need to treat them all equally.

  • DJ

    Besides, not all churches oppose gay marriage.

  • Sue

    What if IRC 501(h) was amended?

    As it stands now, exemption from taxation under 501(a) is denied if a “substantial” part of an organization’s activities involve “propaganda, or otherwise attempting, to influence legislation”.

    However, each organization is allowed some lobbying expense, as long as it doesn’t exceed the “lobbying ceiling amount”.

    This ceiling varies based on the organization’s size. For example, an organization whose exempt purpose expenditures are $1 million may spend up to $175,000 on lobbying. An organization whose exempt purpose expenditures are $10 million may spend up to $650,000 on lobbying.

    The lobbying maximum is $1 million (see IRC Sec. 4911) — that’s a lot of tax-free benefit going to lobbying — both in terms of tax deductions for donors and for the tax-free status (income, property, etc) for not-for-profit organizations.

    Let’s level the playing field — they get a de minimis amount of lobbying of $10,000. This would allow for inadvertent errors by not-for-profit organizations — the letter that goes out to the Congressman that could have been interpreted as “lobbying” — but remove the remaining lobbying allowance.

    If the members of organizations then wish to establish an independent political action committee (no donations deductible to the donor, no donations coming from the non-profit side) — that would be allowable under current law.

    Please let me know what you think.

  • DT

    The problem is that you would establish a set of additional charitable groups such as ACORN has done. They are really all the same but they are separately chartered and registered. To control free speech by any means is a mistake. What you may want is disclosure about who provides the funds to groups and then voters (or legislators) know who the people are that are behind the message. The fact that I do not agree with someone or that they make a persuasive argument that makes “my” side lose should not result in them being restricted from airing their feelings.

  • DJ

    I think Sue’s argument makes sense. Political Action Committees are allowed to promote whatever viewpoints they want– but contributions are not tax-deductible. And they shouldn’t be. Politics and charity are not the same. Free speech is guaranteed, but need not be subsidized by tax deductions.

    On the other hand, I think organized political action committees are a bad idea to begin with– they suggest that whoever has the most money gets the most access. I’d like to see lobbying banned altogether. Let’s bring it back to one person talking to another. Corporations, unions, churches, and clubs should all be prohibited from influencing the political process– at least directly. Persons have a right to free speech, but I don’t see that extending to associations– and I question whether donations ought to be protected by the free speech clause anyway. Paying someone to say something is fundamentally not the same as saying it yourself.

  • DT

    The Constitution gives the right to freedom of association. That association has every Constitutional right to the collective individual rights of free speech. Members who end up disagreeing with their association may leave it and the association falls apart. Groups protesting are far more effective than individuals protesting and the Constitution protects that right too. Don’t take away the rights of those with whom you don’t agree. Next it will be you who loses the rights because you are no longer “main stream.”

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