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Lloyd Hitoshi Mayer (Notre Dame; Google Scholar), Is Tax Regulation Totally different? Unconstitutional Circumstances, Spiritual Organizations, and Taxation, 98 Notre Dame L. Rev. Reflection 81 (2023):
In frequent with different charities, non secular organizations get pleasure from important advantages beneath federal tax legislation, together with exemption from earnings tax and the power of donors to deduct their contributions for earnings, reward, and property tax functions. However these advantages are usually not costless. Additionally in frequent with different charities, non secular organizations are prohibited from offering personal inurement and personal profit, partaking in a major quantity of lobbying, intervening in political campaigns, selling illegality, or performing opposite to elementary public coverage.
The IRS takes the place that these limitations apply with equal drive to all tax-exempt charities, together with non secular organizations. Some non secular organizations have challenged the appliance of the lobbying, political marketing campaign intervention, illegality, and elementary public coverage limitations on non secular liberty grounds, invoking the Free Train of Faith Clause of the First Modification and, extra not too long ago, the federal Spiritual Freedom Restoration Act (RFRA). Thus far, nevertheless, federal courts have rejected these challenges, concluding that they’re permissible situations on the tax advantages loved by non secular organizations.
This essay reconsiders this conclusion and the arguments in help of it.
One such argument is that tax legislation is one way or the other totally different from different authorized contexts for functions of making use of the unconstitutional situations doctrine to non secular group. The constant refusal of the courts to permit free-exercise-of-religion-based exemptions from usually relevant federal tax legal guidelines suggests this can be the case. This distinction might be seen as a strand of the more and more disfavored view generally known as “tax exceptionalism.” However I argue that this distinction as an alternative suits inside the extra conventional compelling governmental curiosity and least restrictive means evaluation codified in RFRA and that arguably utilized within the Free Train of Faith Clause context earlier than the Supreme Courtroom’s choice in Employment Division v. Smith.
Extra particularly, tax legislation is totally different due to its complicated guidelines relevant to all people and entities referring to expenditures for lobbying, political marketing campaign intervention, and criminality. The complexity of those guidelines, and the chance that granting exemptions from them for any purpose would undermine their uniform and constant utility, help the conclusion that the federal government has a compelling curiosity in not permitting exemptions, and that the present limitations imposed on tax-exempt charities, together with non secular organizations, are the least restrictive means to take action. Because of this, constitutional and RFRA free train of faith rights don’t require exemptions for non secular organizations from these present limitations even when such organizations are motivated by their non secular beliefs to have interaction within the restricted actions. Moreover, whereas this argument doesn’t apply on the contrary to elementary public coverage limitation, the Supreme Courtroom has accurately concluded that within the situations the place there’s a elementary public coverage, guaranteeing that tax-supported charities don’t undermine that coverage can also be a compelling governmental curiosity and prohibiting them from doing so is the least restrictive technique of furthering that curiosity.
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https://taxprof.typepad.com/taxprof_blog/2023/07/mayer-unconstitutional-conditions-religious-organizations-and-taxation.html
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