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A tax exemption is not necessarily a Golden Ticket from the IRS p2

We are talking about taxes, churches/religious institutions and political activity. In our last post, we wondered if there are consequences for religious organizations that cross the line between church and state by getting involved in political campaigns. The answer is yes. In theory.

Remember, too, that religious organizations are not only exempt from federal taxes. State tax laws also exempt them. The Georgia Department of Revenue website explains that taxation is the rule, and exemptions are the exception. Along with religious organizations, the exceptions include public charities, libraries and nonprofit hospitals.

With property tax in this state, a religious organization is not taxed on its place of worship or its place of burial. But religious organizations can own other property, some of which is also exempt. For example, a Lutheran minister may live in a parish house. The church owns the house, and the minister pays rent. The money collected as rent must go back into church operations for the exemption to continue.

As we said in our last post, though, the exemption does not let a religious organization off the hook. In return, the organization pledges to like a charity and not to engage in illegal practices, among other things. 

Two shalt-nots are our focus in this series of posts. First, the organization may not devote "a substantial part" of its programs to lobbying or trying to influence legislation. Second, the organization may not participate in the political campaign of any candidate for public office.

This is the price a church pays to be tax-exempt as well as to keep the government, in general, out of its affairs. These two rules are based on the separation of church and state, the doctrine that U.S. lawmakers value enough to codify. In 1954, a federal law went into effect, prohibiting tax-exempt organizations from electioneering -- that is, participating directly in campaigns for public office.

And there are consequences for a violation.

To be continued.

Source: The Week, "The IRS needs to start investigating churches," Amelia Thomson-DeVeaux, June 24, 2014

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