Some historical and global examples of tax resistance → religious groups and the religious perspective → tax status of churches in U.S.

The New York Times has been running an interesting series of articles about the various tax breaks (and exemptions from many other laws) that are available to religious groups in the U.S.:

There’s a lot of meat in those articles, and a lot of food for thought for the tax resistance (and libertarian) set. Seems that you can kiss a lot of taxes and government regulation goodbye if you find (organized) religion — more cynically, it’s easy to see many of these taxes and regulations as penalties the government applies to people, businesses, and non-profit organizations to punish them for not being religious.

Speaking of church and state… in the United States, churches and other “non-profit organizations” may apply for a tax-favored status. But if they do this, they have to follow certain rules. Among those are strong restrictions on political activity: they cannot endorse candidates for office, for instance.

Churches have, by and large, been plenty willing to keep their traps shut concerning political races in exchange for the tax break. But now some think they ought not to have to make the trade. They think they should get the tax break without having to put on the muzzle. The Alliance Defense Fund is trying to recruit many churches to defy the ban in an act of coordinated civil disobedience, in the hopes of creating a test case with which they can legally challenge the ban.

Some bits-and-pieces from here-and-there:

  • Not all tax resistance has to do with grand global issues or conscientious objection; some is just the protest of people who feel they’re getting shafted by a government that takes too much and provides too little. Case in point: Scott Frisby of Southend. He says the government has failed to provide even the minimum of services, and so he’s dropping his subscription (or at least 25% of it). Scroll down to the bottom to read the hilarious response from Southend Council’s customer service department.
  • The Indianapolis Baptist Temple started refusing to pay federal taxes in , when pastor Gregory Dixon “decided the church would break all ties with the government and no longer act as its agent in withholding taxes from its employees,” citing Constitutional freedom of religion as his mandate for taking his church out from under Uncle Sam’s thumb. For several years, nothing came of this defiance, but in the early 1990s, the IRS started seeking back taxes, eventually filing liens against the church and against Dixon. The church fought back in court, but lost a series of appeals, finally getting turned down by the U.S. Supreme Court in . Here’s the story, with links to the court opinions.
  • War Resisters’ International has released their Handbook for Nonviolent Campaigns for free, on-line.
  • A populist form of tax resistance is aimed at speed and red-light cameras that scan license plates of offending vehicles, snap photos of the drivers, and automatically issue traffic tickets. These cameras are more a revenue-raising program than a safety-encouraging one, and they’re causing lots of resentment.

    A driver has racked up dozens of speeding tickets in photo-radar zones on Phoenix-area freeways while sporting monkey and giraffe masks, and is fighting every one by claiming the costumes make it impossible for authorities to prove he was behind the wheel.

    It took Arizona state police months to realize the same driver was involved and was refusing to pay the fines. By the time they did, more than 50 of the tickets had become invalid because the deadline for prosecution had passed.

    Arizona began deploying the stationary and mobile cameras on state highways a year ago, and through had issued more than 497,000 tickets. Of those, about 132,000 recipients had paid the fine of $165 plus a 10 percent penalty, netting the state more than $23 million. Arizona is the first to deploy such technology on highways statewide.

    Many of the remaining tickets are either new, being appealed or have just been ignored. The state didn’t have figures immediately available on the breakdown.

    The backlash against the cameras has been fairly constant, however. Arizonans have used sticky notes, Silly String and even a pickax to sabotage the cameras.

    Many believe the shooting death of speed-enforcement van operator Doug Georgianni on on a Phoenix freeway was a result of anger over the cameras, although authorities haven’t made that direct allegation.

    “It’s a peaceful act of resistance — that’s what this country was founded on,” VonTesmar said. “I’m not thumbing my nose at DPS, but photo radar is not a DPS officer protecting public safety. It’s nothing but a speed tax.”

  • Tax resister NTodd Pritsky shares some meditations on civil disobedience, complicity, and knowing how much of yourself to devote to a better world when it seems like even 100% isn’t enough.
  • Forbes reports that a Treasury Inspector General for Tax Administration investigation turned up evidence that IRS employees are issuing huge fraudulent “refunds” for fun and profit, but the IRS doesn’t have procedures in place to keep track of how manual refunds are generated, so nobody knows for sure.

As I reported , some American churches are protesting the rule that requires non-profit organizations like churches to refrain from making political endorsements if they want to qualify for certain tax exemptions. They think churches ought to be able to speak out without restriction about political candidates, without endangering their tax exempt status.

What makes this a Picket Line topic is that these churches have decided to press their case by means of civil disobedience. They are making explicit political endorsements from the pulpit while continuing to file their tax returns as though they were compliant tax exempt non-profit organizations, and daring the IRS to come after them — a form of tax resistance.

One pastor put it this way: “The Bible says render unto Caesar what is Caesar’s and to God what is God’s. But Caesar is demanding more and more of what was once considered God’s matter, and pastors have been bullied and intimidated enough.”

Now in its fourth year, the movement seems to be growing, with hundreds of churches now participating in the annual “Pulpit Freedom Sunday.” It is very much a creature of the Christian right-wing, via the Alliance Defense Fund, whose other projects include trying to kick gays out of the military (so as not to offend the religious liberties of military chaplains, apparently), defending the rights of Christian students against various campus speech codes and the like, countering that darned homosexual agenda and trying to make The Gay unfashionable again, and various anti-abortion crusades.

Some of the churches who are participating in the movement go out of their way to provoke the IRS — in some cases, sending audiotapes of their political sermons to the agency as unmistakable evidence of their deviation from the legal requirements.

But so far, according to the protest organizers, none of the participating churches has been audited or threatened with the revocation of their nonprofit status. Indeed, the Alliance Defense Fund has been unable to find a single case, since the rule restricting tax-exempt non-profits from making political endorsements was first made into law over fifty years ago, where a church has lost its tax exemption because of the content of a sermon (though I think the IRS has successfully gone after churches who have published political ads or voter guides).

Either way, though, the protest succeeds: If the IRS goes after one of the churches, the Alliance plans to launch a legal battle that they are confident they will ultimately win on First Amendment grounds. If it doesn’t, the protesters have proven that the legal restriction on political sermons by tax exempt churches is a dead letter, and more preachers will feel free to be able to tell their flocks who it is that God wants them to vote for.

Some bits and pieces from here and there:

  • Marijuana has been decriminalized, at least to some extent, in many jurisdictions in America. This has brought the industry above-board, and has exposed it to taxation. Under federal law, businesses involved in the marijuana trade cannot deduct their business expenses from their gross profits when figuring their income tax. This is a result of the great piling-on of the Just Say No era, when politicians were falling all over themselves to come up with new ways to stick it to dope smokers. This puts above-ground marijuana vendors in a bind, as “it is conceivable that [this law] could require [such] a business to pay more in tax than its total profits for the year.” Tax professor Benjamin M. Leff has a possible solution: organize as a 501(c)(4) social welfare organization. Meanwhile, marijuana purchasers should be aware that the federal government is making a big profit on anything they purchase in the above-ground market, and should for that reason prefer to purchase from the same underground dealers they’ve trusted for years.
  • A number of American churches want to keep their tax-exempt nonprofit status without heeding the legal ban on political endorsements that accompanies it. 1,600 of them backed up this opinion with civil disobedience — defiantly making overtly political stands from the pulpit, and sometimes even recording them and turning the recordings over to the IRS. So far the agency has done nothing in response, and many are speculating that it feels that in a churches vs. IRS battle, the IRS is most likely to end up with a black eye, no matter what the law says. But now the Freedom From Religion Foundation is forcing the issue. The Foundation has filed a lawsuit asserting that the IRS is illegally permitting religious non-profit groups to engage in political activity it forbids to non-religious non-profits.
  • The IRS commissioner sent a memo to agency employees about the expected impact of “sequester” budget cuts. Excerpt:

    We will continue operating under a hiring freeze, reduce funding for grants and other expenditures and cut costs in areas such as travel, training, facilities and supplies. In addition, we will need to review contract spending to ensure only the most critical and mandatory requirements are fully funded.

    Despite current and planned efforts to cut expenses, our greatest expense, by far, is employee pay. As our budget is reduced for the remainder of the fiscal year, it appears a number [5–7 per employee this year] of furlough days will be necessary given the size of the anticipated budget cut to the IRS.

    Colleen M. Kelley, president of the National Treasury Employees Union, noted that “the IRS is operating this filing season with 5,000 fewer employees than just two years ago. Now, IRS employees face potential furloughs and the loss of pay for a week or more; and all federal workers are continuing to function under the threat of at least a partial government shutdown when the current continuing resolution expires on .” In addition, she says, “IRS employees… have had their pay frozen for over two years.”

, a jury unanimously acquitted the Oregon rebels who occupied a U.S. federal wildlife refuge post of all of the most serious charges against them. Since they seemed to be guilty beyond a reasonable doubt of those charges, with buckets of evidence to back that up, and since some of them were representing themselves in court rather than trusting their fate to lawyers, the acquittals came as a big surprise.

A jury of twelve seems to have all decided that the federal government can go fuck itself, evidence or no evidence. That’s an exciting development, though I worry that the government may decide it can no longer trust juries to roll over and give it what it wants and may decide to hold future trials in the Waco model instead.

Throwing shade at the IRS seems to be growing in popularity, too, with both church leaders and student newspapers openly defying the agency’s rules forbidding non-profits from endorsing political candidates.