(USA) Tax exempt status revoked for churches and orgs who play politics

[rayne]

LINKY

Enforce federal 501(c)(3) regulations by removing the tax-exempt status from churches that engage in political activity. Since 2008, pastors of some churches have openly supported and advocated specific political candidates in sermons to members in early October in an event referred to as "Pulpit Freedom Sunday". According to Reuters, videos of these sermons are sent to the offices of the IRS.


According to section 501(c)(3) of the Internal Revenue Code, the provision of the tax code from which these churches derive their tax-exempt status, a compliant organization must not "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of ... any candidate for public office."


The IRS has failed to remove the tax-exempt status of these churches despite their violations of tax code. This must change, and the law must be applied equally to everyone.

Now I think this is a good idea, well at least a step towards getting tax exempt status revoked for all churches. I'm not sure if this can be applied to Australia - I'm not certain about Australian tax laws. The current reasons for tax exempt status I've been able to find are based history ("It's never changed or been challenged since its implementation so why change it now?") and "churches are tax exempt under the principle that there is no surer way to destroy the free exercise of religion than to tax it" and the "social benefit" theory of tax exemption:

"This recognises the fact that churches provide great benefits to society by their good works. Churches minister to the poor and needy in the community, provide numerous social services. The social benefit theory justifies tax exemption for churches as a kind of bargain -- churches provide needed services, so they are entitled to tax exemption".

On a side note: Does the social benefit theory apply anymore? Especially to organisations like the Salvation Army who runs under the framework of deserving/undeserving recipients of their services based on what they consider moral. Most non-profit organisations base their service delivery not on what they consider moral but on the gaps in services that they are trying to fill.

[Sieveboy]

Very broadly and practically Australian Tax laws lack this kind of rule Rayne, i am on a limited connection, so I might be able to provide more information in about 2 weeks, sorry but my holiday takes priority

[rayne]

No worries. Attempting to find information on this in an Australian context is proving difficult but I'll persevere.

[Logic please]

Originally Posted by rayne

No worries. Attempting to find information on this in an Australian context is proving difficult but I'll persevere.

Broadly, in Aust access to charity tax concessions is dependent upon meeting the definitions of "charity" and "charitable purpose":

Originally Posted by Definition of charity

A charity is an institution or fund established for a charitable purpose.

Originally Posted by Definition of charitable purpose

A charitable purpose is one which the law regards as charitable. The term 'charitable' has a technical legal meaning which is different from its everyday meaning. Charitable purposes are any of the following purposes:

• the relief of poverty, sickness or the needs of the aged
• the advancement of education
• the advancement of religion
• the provision of child care services on a non-profit basis
• other purposes beneficial to the community.

(my emphasis)

While that blanket free kick for religion stays unchanged, a move analogous to the US one you linked is unlikely. Hence the AFA's representations on the issue, as linked by Mr B.