An Atheist Charity is Suing the IRS After Having Its Tax Exemption Revoked October 11, 2018

An Atheist Charity is Suing the IRS After Having Its Tax Exemption Revoked

There are a lot of U.S. laws that privilege religious institutions over other non-profits, and the Freedom From Religion Foundation has been working to expose those differences and get the courts to put everyone on a level playing field.

The most famous example of this involves a case in which FFRF’s co-presidents applied to the IRS for a tax break on their housing — just like the “Parsonage Allowance” that pastors receive. They didn’t get it, and their lawsuit over the matter is currently waiting for a decision from an appeals court.

Now FFRF is suing over a separate matter.

This one involves their charity arm, Nonbelief Relief, which has given away more than $590,000 over the past several years to assist disaster recovery efforts, help atheists trying to escape oppressive regimes, and support groups like Doctors Without Borders.

For the past few years, Nonbelief Relief has chosen not to file its Form 990s. These are the documents all non-profits are supposed to submit to the IRS, documenting income, expenses, major donations, salaries, etc. It’s the tool non-profit watchdogs like Charity Navigator use in order to “grade” groups on whether they’re acting ethically and responsibly.

Why did Nonbelief Relief not file the paperwork? Because they wanted to see what the IRS would do about it. And in August, the IRS sent a letter to FFRF saying that Nonbelief Relief’s tax exemption was being revoked — a move that would seriously curtail donations to the organization since contributions would no longer be tax-deductible.

According to FFRF, they’re being punished for something churches do all the time without consequence. Indeed, a number of megachurches are able to hide their pastors’ salaries from the public — including their own congregations — because they don’t have to submit these forms. But why should churches, and not charitable atheist organizations, be allowed to get away with this lack of transparency?

That’s a form of state-sponsored hypocrisy that favors religion, FFRF argues in a lawsuit against the IRS filed this morning, and the government needs to put a stop to it.

Annie Laurie Gaylor, president of the charity and FFRF co-president, said the suit is “part and parcel” of an ongoing legal strategy of the Wisconsin-based atheist group that has challenged an “IRS code that uniquely advantages religion over nonreligion.”

“We knew that there would be consequences, most likely,” she told Religion News Service the day before the complaint was filed. “We’re just doing the same thing that churches do, and church-related groups, and they do not lose their tax exemption for not filing, so why should we?”

FFRF is demanding that the tax exemption for Nonbelief Relief be reinstated or that the IRS start treating all non-profits equally.

While Nonbelief Relief has given away hundreds of thousands of dollars over the years — $592,888 since 2015, according to the lawsuit — you have to wonder if its creation was really just a benevolent way of getting to this very moment. It would be a genius move if that were true. Sure, they’ve given away money for important causes… but it could also have been a way to challenge the IRS’ rules without jeopardizing FFRF itself. The group can now say it does charitable work, just like churches claim to, while having the necessary legal standing to bring forth this case. (FFRF didn’t immediately respond to my question about that.)

Without taking away from the great work this charity has done, it’s tempting to think this was just a clever way to sue the IRS (while helping people along the way).

The government’s double standard on this matter is made very clear in FFRF’s lawsuit:

The preferential treatment of churches and affiliated religious organizations results in obligations imposed on secular non-profits, including the Plaintiff, that are not imposed on churches; the benefits of tax exempt status also are denied to the Plaintiff as a penalty, including the loss of otherwise tax-deductible donations from donors.

The discriminatory revocation of the Plaintiff’s §501(c)(3) status provides churches and other affiliated religious organizations a competitive advantage in fundraising and charitable giving solely because they operate under the guise of religion, and despite the similar activities of the Plaintiff as a nonreligious charitable organization.

Keep in mind that the IRS also hasn’t revoked the tax exemptions of churches even when pastors purposely break the rules and endorse political candidates from the pulpit — despite promising to do so after another FFRF lawsuit.

This is only the latest example of the IRS treating churches differently — and preferentially — from other charities. It needs to end, and FFRF has become exceptionally good at creating the proper legal environment in which to bring forth challenges to how the tax laws are enforced.

The differential enforcement policies and practices of the Internal Revenue Service, under the direction of the Defendant [Acting Commissioner of the Internal Revenue Service David J. Kautter], constitute discrimination against non-religious non-profit organizations solely on the basis of religious criteria.

Religion News Service asked FFRF’s co-president Annie Laurie Gaylor if she wanted the IRS to drop Form 990 requirements for all non-profits (including churches), or if she wanted all non-profits to be required to fill them out. Gaylor said she had no preference; it was up to the courts to choose the remedy. But if the IRS ends up forcing churches to submit 990s just like everybody else, you can bet there will be an outcry from the Religious Right. They love pretending they’re victims, and they would be furious at the prospect of having to play by the same rules as everybody else.

***Update***: FFRF tells me “Nonbelief Relief was created to help ameliorate injustice and suffering by nonbelievers giving as a group.” In other words, not for some ulterior motive. That said, when it was formed, their attorney, after asking the IRS for a reprieve from filling out the Form 990 (which was denied), let the government know the 990 would not be filed in protest.

(Image via Shutterstock)

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