IFAS | Freedom Writer | January/February 1993 | taxcode.html

Valuable deductions
How the Christian Right uses the tax code
to bankroll and conceal its political machine

By Frederick Clarkson

When politics and religion mix, the result can be disastrous, transforming both, along with the communities they touch. Our nation's founders, such as Thomas Jefferson and James Madison, sought to incorporate religious tolerance and pluralism into our founding documents, in order to avoid the religious warfare that wracked Europe for mil lennia. Thus when Pat Buchanan declared a "religious war" at the Republican National Convention, it sent a deep chill down our collective spine, and its implications are still rumbling throughout our national psyche.

Religious groups of all kinds are often reluctant to get involved in politics because of the potential threat to their federal non-profit tax status. Others get involved, but are careful to stay within the confines of IRS regulations. However, last fall, Randall Terry, of Operation Rescue, threw caution to the wind in a letter to 37,000 churches: "Our tax status be damned if it prevents us from proclaiming God's truths." A vote for Clinton, according to Terry, would be a "sin against God." The Church at Pierce Creek in Binghamton, NY (where Terry is a board member), apparently shares this view. The church took out full-page ads in USA Today and the Washington Times, claiming that Christians shouldn't vote for Clinton, lest they follow "another man in his sin.

The IRS is investigating, thanks to a formal complaint by Americans United for Separation of Church and State, an advocacy group based in Silver Spring, Maryland.

"Churches have every right to speak on the moral issues of the day," says Barry Lynn, executive director of Americans United, "but the IRS quite appropriately draws the line at partisan politicking. The integrity of both religion and government are harmed when churches become cogs in a political machine."

Unfortunately, Randall Terry & Co. are not alone in their effort to inject tax-exempt funds into partisan politics. Several major Christian Right organizations also seem to be exploiting the lax enforcement of the tax code. Government at all levels is generally reluctant to pursue such matters because of the political sensitivities usually involved. Conservative evangelicals, in particular, are quick to cry "persecution." Indeed, such groups as the Christian Coalition, Traditional Values Coalition, and Citizens for Excellence in Education appear to have taken government generosity in interpreting and enforcing the law, and have turned their non-profit tax status into a cash cow, and an important element of their now famous "stealth" strategy.

Two tax statuses are at issue. Organizations qualifying for section 501(c)(3) of the tax code are charitable, educational, or scientific organizations to which people may make tax-deductible contributions. Prior to the 1992 elections, the IRS publicly warned churches, almost all of which are 501(c)(3), that "Organizations exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code are prohibited from participating or intervening, directly or indirectly, in any political campaign on behalf of, or in opposition to, any candidate for public office."

Another tax status is 501(c)(4), under which groups are tax-exempt, but contributions are not deductible. Generally, C4s, as they are known among politicos, are allowed to do some lobbying and participate in informational programs and distribute literature about issues, but they may not expend any resources on partisan politics or intra-party affairs.

One advantage of being a C4 as distinct from a political action committee (PAC), is that reporting requirements on contributions and expenditures are less stringent. For example, a PAC is required to inform the Federal Election Commission of contributors who give $200 or more, by name, address, and occupation. For those who want to conceal their donors, the C4 tax code is a perfect camouflage.

Here is a brief resume of Christian Right groups that maybe bending the tax code for political advantage.

The pattern of exploiting the tax code to conceal the agenda, strategy, and flinders of the Christian Right is integral to their capacity to win elections at all levels. Proper enforcement of state and federal law would eliminate much of the "stealth" advantage, and level the playing field in the interests of democracy.

© 1998 Institute for First Amendment Studies, Inc.