Grant M. Newman (J.D. 2019, Harvard), Note, The Taxation of Religious Organizations in America, 42 Harv. J.L. & Pub. Pol'y 681 (2019):
Christ taught his disciples to “[r]ender to Caesar the things that are Caesar’s, and to God the things that are God’s." The Supreme Court has, to an extent, rendered to God what is God’s by repeatedly acknowledging that it will not involve itself in the internal affairs of religious organizations. Nevertheless, the extent to which religious organizations remain vulnerable to involvement from other branches of government remains a pertinent question, especially with regards to the government’s power to tax.
This Note investigates the extent to which religious organizations are vulnerable to such involvement. A prime example of such involvement is Congress’ ability to use the Internal Revenue Code to the detriment of religious organizations. As it ensures that what is Caesar’s (i.e., taxes) is rendered to Caesar (i.e., the federal government), any policy of Congress and the Internal Revenue Service (I.R.S.) that thwarts the faithful from rendering to God what is God’s has the potential to impose a prohibitive burden on the operation of religious organizations. The potential to hinder the work of religious organizations through taxation is great. Indeed, “the power to tax involves the power to destroy.” Insofar as Congress retains the power to tax religious organizations, it likewise maintains the power to destroy.
In short, religious organizations benefit tremendously from their tax-exempt status. However, this tax-exempt status is not a given; the tax-exempt status for religious organizations is neither a right that was found to be in existence prior to the formation of the United States and therefore enshrined in the Constitution, nor is it a right created by the Constitution. Rather it is a status that is based on the consent of Congress and listed deep in the bowels of the United States Code. Therefore, religious organizations and their allies must remain vigilant in ensuring that their representatives in Congress and officials in the executive branch uphold those portions of the Tax Code that exempt religious organizations from tax obligations. ...
Conclusion. As mentioned previously, religious organizations benefit greatly from being exempt from taxes. But this benefit is not a given. On the contrary, this benefit can be revoked by Congress working in tandem with the President and the Secretary of the Treasury and receiving the blessing of the courts. Indeed, as Gaylor suggests, the enemy of tax-exempt religious organizations stands at the gates. While defenses do exist, these defenses are only as strong as the willingness of the Secretary of the Treasury and the courts to uphold these defenses. As such, much depends on the Secretary of the Treasury and federal judges. Religious organizations must therefore be vigilant with regard to who holds those positions. In particular, proponents of the tax-exempt status for religious organizations must properly vet candidates for President and for Senate to ensure that they will require nominees for Secretary of the Treasury and federal judgeships to support the tax-exempt status of religious organizations. Only by ensuring that the Secretary of Treasury and federal judges are firmly on the side of tax-exempt religious organizations can proponents of such religious organizations be assured that the tax exemption will be protected.