TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, February 10, 2014

Schmalbeck Presents A New Tax-Exempt Category for Churches at San Diego

SchmalbeckRichard Schmalbeck (Duke) presented Churches and Political Speech: Considering a New Exempt Category for Churches at San Diego on Friday as part of its Tax Law Speaker Series:

The U.S. tax law defining organizations that are eligible for treatment as charitable determines both the tax exemption of the organization and the deductibility for tax purposes of donations to the organization. Among the definitional conditions is an absolute ban on participation in political campaigns. While there are sound policy considerations supporting this ban on campaigning, it may operate to restrict inappropriately the expressive functions of some organizations. In particular, churches are organizations with unique interests in expression of their views. This paper offers and defends a simple solution to this situation by suggesting that churches be allowed to participate in campaigns, while denying deductions for contributions to churches. The author predicts with great confidence that this proposal will not be enacted anytime soon, but hopes that discussion of why this might be a promising idea will illuminate aspects of this problem that may lead to any of several part-way solutions suggested in the paper.

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I hope this paper includes a little discussion of churches not filing Form 990's like other nonprofits, which is a very bad rule because it leads to corruption in the Church.

Posted by: Eric Rasmusen | Feb 10, 2014 4:23:24 PM