From today's Washington Post (http://www.washingtonpost.com/ac2/wp-dyn/A26244-2004Jun8?language=printer):
House Republican leaders have tacked on to a major jobs bill a provision
that would give religious leaders more freedom to engage in partisan politics
without endangering the tax-exempt status of their churches.
Conservative Christian groups have been pushing for such legislation for years, while civil liberties organizations and religious minorities have opposed it. But unlike past proposals, which were stand-alone bills, the current provision is attached to a huge tax bill that House leaders have placed on a fast track for consideration.
...
Under current tax rules, clergy members are allowed to speak out on
political issues and to lead nonpartisan voter registration drives. But the
IRS can revoke a congregation's 501(c)3 tax-exempt status if it endorses
candidates or engages in partisan politics.
The American Jobs Creation Act, introduced Friday by House Ways and Means
Committee Chairman Bill Thomas (R-Calif.), is scheduled for markup Thursday
and a vote on the House floor next week. The bill's main purpose is to cut the
top corporate tax rate from 35 percent to 32 percent and provide other tax
relief to businesses, in return for repealing subsidies that have triggered
European sanctions on U.S. farmers and manufacturers.
But on page 378 of the bill is a provision entitled "Safe Harbor for
Churches." It would allow clergy members to engage in political activity,
including endorsing candidates, as long as they make clear that they are
acting as private citizens and not on behalf of their religious organizations.
They could not make partisan political statements in church publications, at
church functions or using church funds.
The provision also would allow clergy members to commit three
"unintentional violations" of the tax rules on political activity each year
without risking the loss of tax-exempt status. After the first violation, the
church, synagogue or mosque would have to pay corporate taxes on one week's
worth of its annual revenue. For the second violation, the penalty would be
taxation of 50 percent of the organization's annual revenue. The penalty for
the third violation would be taxation of a year's revenue, but not permanent
loss of its tax exemption.
...
Under current tax rules, clergy members are allowed to speak out on political issues and to lead nonpartisan voter registration drives. But the IRS can revoke a congregation's 501(c)3 tax-exempt status if it endorses candidates or engages in partisan politics.
The American Jobs Creation Act, introduced Friday by House Ways and Means Committee Chairman Bill Thomas (R-Calif.), is scheduled for markup Thursday and a vote on the House floor next week. The bill's main purpose is to cut the top corporate tax rate from 35 percent to 32 percent and provide other tax relief to businesses, in return for repealing subsidies that have triggered European sanctions on U.S. farmers and manufacturers.
But on page 378 of the bill is a provision entitled "Safe Harbor for Churches." It would allow clergy members to engage in political activity, including endorsing candidates, as long as they make clear that they are acting as private citizens and not on behalf of their religious organizations. They could not make partisan political statements in church publications, at church functions or using church funds.
The provision also would allow clergy members to commit three "unintentional violations" of the tax rules on political activity each year without risking the loss of tax-exempt status. After the first violation, the church, synagogue or mosque would have to pay corporate taxes on one week's worth of its annual revenue. For the second violation, the penalty would be taxation of 50 percent of the organization's annual revenue. The penalty for the third violation would be taxation of a year's revenue, but not permanent loss of its tax exemption.
Here's the text of the bill:
H.R. 4520, the American Jobs Creation Act of 2004'.
SEC. 692. SAFE HARBOR FOR CHURCHES.
- (a) IN GENERAL- Section 501 is amended by
redesignating subsection (q) as subsection (r) and by inserting after
subsection (p) the following new subsection:
- `(q) SAFE HARBOR FOR CHURCHES-
- `(1) STATEMENTS BY RELIGIOUS LEADERS AS PRIVATE
CITIZENS- An organization described in section 508(c)(1)(A) (relating to
churches) shall not fail to be treated as organized and operated exclusively
for a religious purpose, or to have participated in, or intervened in any
political campaign on behalf of (or in opposition to) any candidate for
public office, for purposes of subsection (c)(3), or section 170(c)(2)
(relating to charitable contributions), 4955, or 4956 solely by reason of a
statement by a religious leader of such organization which is clearly
identified as a statement made as a private citizen and not made on behalf
of or in representation of such organization. A statement shall not be
treated as clearly identified for purposes of this paragraph if such
statement is made in an official publication of such organization, at an
official function of such organization, or if such statement is paid for in
whole or part by such organization.
- `(2) UNINTENTIONAL VIOLATIONS- An organization
described in section 508(c)(1)(A) (relating to churches) shall not fail to
be treated as organized and operated exclusively for a religious purpose, or
to have participated in, or intervened in any political campaign on behalf
of (or in opposition to) any candidate for public office, for purposes of
subsection (c)(3), or section 170(c)(2) (relating to charitable
contributions) unless such organization or any of its religious leaders so
participates or intervenes on more than 3 separate occasions during any
calendar year. This paragraph shall not apply with respect to any such
participation or intervention which constitutes an intentional disregard by
such organization or any of its religious leaders of the prohibition of such
activity under subsection (c)(3) or section 170(c)(2).
- `(3) CROSS REFERENCE-
- (b) IMPOSITION OF TAX ON IMPERMISSIBLE
ACTIVITIES-
- (1) IN GENERAL- Subchapter C of chapter 42 is
amended by inserting after section 4955 the following new
section:
`SEC. 4956. TAX ON IMPERMISSIBLE ACTIVITIES BY CHURCHES.
- `(a) IMPOSITION OF TAX- There is hereby imposed on
each organization described in section 508(c)(1)(A) which is an organization
exempt from tax under section 501(a) by reason of section 501(q)(2), a tax
equal to--
- `(1) the highest rate of tax specified by
section 11(b), multiplied by
- `(2) the gross income of such organization for
such calendar year.
- The tax imposed by this subsection shall be paid
by the organization.
- `(b) REDUCTION FOR LESS THAN 3 VIOLATIONS- In the
case of an organization described in subsection (a) which committed not more
than 2 acts of participation in, or intervention in a political campaign on
behalf of (or in opposition to) any candidate for public office during such
calendar year, the amount taken into account under subsection (a)(2) shall be
the amount which would have been taken into account under subsection (a)(2)
(but for this subsection) divided by--
- `(1) 52 in the case of one such act during such
calendar year, or
- `(2) 2 in the case of 2 such acts during such
calendar year.
- `(c) COORDINATION WITH SECTION 4955- The tax
imposed under this section with respect to any act shall be reduced by the
amount of any tax imposed under section 4955 with respect to such
act.'.
- (2) CLERICAL AMENDMENTS-
- (A) The table of section for subchapter C of
chapter 42 is amended by adding at the end the following new
item:
`Sec. 4956. Tax on impermissible activities by churches.'.
- (B) The heading for subchapter C of chapter 42
is amended by striking `EXPENDITURES' and inserting
`ACTIVITIES'.
- (c) REPORTING-
- (1) REQUIREMENT- Subsection (a) of section 6012
is amended by adding at the end the following new paragraph:
- `(10) Every organization described in section
508(c)(1)(A) with respect to which tax is imposed under section
4956.'.
- (2) FORM AND MANNER- Section 6033 is amended by
redesignating subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
- `(h) RETURNS REQUIRED BY CHURCHES PARTICIPATING IN
CERTAIN ACTIVITIES- Any organization on which tax is imposed under section
4956 shall file a return at such time, in such manner, and including such
information as the Secretary may prescribe.'.
- (d) EFFECTIVE DATE- The amendments made by this
section shall apply to acts occurring after the date of the enactment of this
Act.
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