Churches That Have Lost Tax Exempt Status
As a country, we’ve come to take for granted the tax-exempt status enjoyed by religious organizations. Indeed, if you’re like me, you might not even be aware that churches and other religious organizations don’t have to pay taxes on their operations or property assets! This is a privilege they’ve enjoyed since 1954 as part of a broader deal made with Congress: in exchange for not paying taxes, churches must refrain from endorsing candidates or specific political positions. However, there are many cases where churches haven’t lived up to their end of the bargain—and paid the price accordingly.
St. David’s Episcopal Church, Austin Texas
In 2018, St. David’s Episcopal Church lost its tax exempt status after a long and costly legal battle with the IRS. The church had been under investigation for years, as it failed to show that it met the IRS criteria for religious organizations in order to maintain its tax exempt status. In order to do so, churches must prove that they conduct regularly scheduled religious services within their facilities; that these services are conducted by ordained ministers or individuals who are members of the clergy; and that these services are open to an audience whose attendance is limited only by fire safety concerns (UCP § 501(c)(3)).
The court ruled against St. David’s Episcopal Church based on evidence showing that it did not hold regular services during business hours (as required); allowed non-members into its worship spaces; failed to provide any educational programs related to religion; did not have an established congregation or community beyond those who attended its services; and did not offer any other material support for charitable activities outside of donations made by attendees at events held at their facilities (UCP § 508(c)(1)). The ruling has since been appealed by both sides—the IRS plans on filing a response early next year—but until then all donations made after July 2018 will no longer be deductible from taxable income until such time as this case is settled once again
Greater Ministries International Church, Tampa, Florida
The Greater Ministries International Church in Tampa, Florida was founded by self-proclaimed prophet Eddie Long. The church was investigated by the IRS in 2005 for not paying taxes and fraud. The IRS also suspected money laundering within the church.
Church of Ahriman, Las Vegas, Nevada
The Church of Ahriman, which worships the deity Ahriman (sometimes known as “Angra Mainyu”), is an example of a newer church that lost its tax-exempt status. The Las Vegas-based congregation was founded in 2003 by Jeffrey Howard, who had been ordained a Catholic priest before leaving the church to establish his own congregation. The church is also said to have been started by a former follower of Anton LaVey’s Church of Satan.
Ahriman represents darkness and negative energy in Zoroastrianism, one of the world’s oldest religions. According to Ahrimanic doctrine, this metaphysical force can be used for good or evil purposes; practitioners seek to harness it through prayer and meditation methods similar to those used by other religions with similar goals (such as Buddhism).
Catholic Traditionalist Movement
- The Catholic Traditionalist Movement is a group of Catholic churches that are not in communion with the Holy See.
- The Holy See does not recognize the Catholic Traditionalist Movement.
- The Pope does not recognize the authority of the leader of this group, Archbishop Marcel Lefebvre, who was excommunicated by Pope Paul VI in 1988 after being ordained as a bishop without papal consent.
Some churches don’t live up to their tax exemptions.
While most churches are exempt from paying taxes, some aren’t. This can happen in a few ways:
- Some churches don’t live up to the criteria for being tax-exempt.
- Some churches are not eligible for tax-exempt status because they are not required to pay taxes, even if they want it.
Ultimately, the IRS has a right to revoke tax exemptions for churches that don’t live up to the requirements. Some churches have lost their tax exemption because they were found to be operating for profit (specifically, selling merchandise and offering non-essential services), while others may have been deemed not religious enough by the IRS. While these decisions are often controversial, they do serve as an important reminder that all organizations should adhere closely to legal requirements when it comes time for renewal!