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What a legal battle between a Christian nonprofit and the IRS could say about the future of church tax exemption

Religion’s role in politics is growing more contentious. Does that put churches’ tax-exempt status at risk?

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Illustration by Alex Cochran

This article was first published in the State of Faith newsletter. Sign up to receive the newsletter in your inbox each Monday night.

Earlier this summer, the Internal Revenue Service lost a very public fight with a faith-based organization. Officials had to acknowledge they were wrong to deny tax-exempt status to Christians Engaged, a nonprofit that helps people of faith get involved in elections.

When news of the group’s successful appeal broke, many people I know commented that the IRS wouldn’t make the same mistake again anytime soon. But the more I read about the situation and the rules governing tax-exempt status, the more I think clashes like the one involving Christians Engaged will soon be somewhat common.

Before I say more about that conclusion, let’s talk about why the IRS denied the nonprofit’s initial application for tax-exempt status.

Why did the IRS deny Christians Engaged tax-exempt status?

Officials said Christians Engaged violated rules against political campaign intervention. In other words, they thought the group’s efforts to educate people about issues and elections were a thinly veiled effort to get people to support specific campaigns.

To be clear, the IRS did not accuse Christians Engaged of openly promoting individual candidates. But officials did say the group’s intense focus on issues like abortion and marriage made it obvious which party its members were supposed to support.

“The Bible teachings (you focus on) are typically affiliated with the (Republican) Party and candidates,” the IRS’ denial letter explained.

In its successful appeal, Christians Engaged noted that the IRS has previously offered tax-exempt status to similarly situated organizations. For example, officials did not question whether former First Lady Michelle Obama’s election-related nonprofit, When We All Vote, would push its members toward Democratic campaigns.

“Denying tax-exempt status for Christians Engaged while recognizing the exempt status of other organizations who encourage civic engagement from different viewpoints demonstrates the IRS’s impermissible viewpoint discrimination,” wrote Lea Patterson, an attorney with First Liberty Institute, the firm representing the nonprofit, in the appeal letter.

What could the future of church tax exemption look like?

In light of these and other arguments, I think it made sense for the IRS to reverse its initial decision. But I still don’t think we’ve seen the last of conflict over the political activities of faith-based organizations that claim to be nonpartisan.

For one thing, faith-related political activism is growing increasingly controversial. Many Americans, including some policymakers, believe religious leaders are guilty of fanning the flames of political conflict.

For another, there’s a growing God gap between the two parties. IRS officials involved in the Christians Engaged situation aren’t alone in thinking that faith-based political involvement only benefits the Republican Party.

In general, the IRS is a slow-moving organization so it’s unlikely that religious organizations will lose their tax-exempt status en masse anytime soon. However, I wouldn’t be surprised if officials’ relationships with faith-based nonprofits became more and more contentious in the months ahead.

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ISIS-K is an enemy of not just the American government, but also the Taliban. The group is led by “renegade former Taliban militants,” according to Religion Dispatches.

If you, like me, are struggling to keep up with what’s happening in Afghanistan, I encourage you to read Religion Dispatches’ full report. It’s about the country’s recent political history and the factors that could force the Taliban to modernize.

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