According to the IRS, if an organization’s tax-exempt status is revoked, it is no longer exempt from federal income tax and is not eligible to receive tax-deductible contributions. As Albert Mohler, president of The Southern Baptist Theological Seminary, noted in 2015, “The loss of tax-exempt status would put countless churches and religious institutions out of business, simply because the burden of property taxes and loss of charitable support would cripple their ability to sustain their mission.”
With seven words—“It is going to be an issue”—the U.S. government signaled to orthodox Christians that if they don’t drop their opposition to same-sex marriage, their religious institutions could lose their tax-exempt status—or worse.
Those words came in 2015, when the Supreme Court heard oral arguments in Obergefell v. Hodges, the case that legalized same-sex marriage throughout the United States. One exchange highlighted how the ruling could affect religious liberty. Justice Samuel Alito asked Solicitor General Donald Verrilli how it would affect educational institutions that opposed same-sex marriage:
JUSTICE ALITO: Well, in the Bob Jones case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same-sex marriage?
GENERAL VERRILLI: You know, I . . . I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I . . . I don’t deny that. I don’t deny that, Justice Alito. It is . . . it is going to be an issue.
In the 1983 case of Bob Jones University (Bob Jones University v. United States), the Supreme Court’s ruling was clear: the religious clauses of the First Amendment’s do not prohibit the IRS from revoking the tax-exempt status of a religious university whose practices contradict a compelling government public policy.
The policy at Bob Jones was indeed loathsome and contrary to Scripture, which the school later admitted when it apologized for its racist past. But opposition to same-sex marriage is not the same as racial animus. Yet the government, through its representative, signaled that Christian schools may soon be treated like racists and pariahs for refusing to give up the view of marriage shared by almost all people throughout history prior to the 1990s.
The government . . . signaled that Christian schools may soon be treated like racists and pariahs for refusing to give up the view of marriage shared by almost all people throughout history prior to the 1990s.
It’s not merely that Christian schools will have to choose between accepting federal funds and keeping their religious views about sexuality. If the choice were to follow the example of schools like Hillsdale College or New Saint Andrews College and forego taking any federal money, the decisions about what to do would be painful, but obvious.
But what it being proposed is to revoke non-profit status not only of schools but also of churches, a move that would destroy many religious institutions. According to the IRS, if an organization’s tax-exempt status is revoked, it is no longer exempt from federal income tax and is not eligible to receive tax-deductible contributions. As Albert Mohler, president of The Southern Baptist Theological Seminary, noted in 2015, “The loss of tax-exempt status would put countless churches and religious institutions out of business, simply because the burden of property taxes and loss of charitable support would cripple their ability to sustain their mission.”
Beto Follows Obergefell Logic
On Thursday, during a CNN town hall devoted to LGBTQ issues, Democratic presidential candidate Beto O’Rourke was asked, “Do you think religious institutions like colleges, churches, charities—should they lose their tax-exempt status if they oppose same-sex marriage?”
“Yes,” O’Rourke said without hesitation, drawing applause from the Los Angeles audience.
“There can be no reward, no benefit, no tax break for anyone—or any institution, any organization in America—that denies the full human rights and the full civil rights of every single one of us,” he added. “So as president we’re going to make that a priority and we are going to stop those who are infringing on the rights of our fellow Americans.”
Only four years after Obergefell, O’Rourke is showing Christians that the threat posed by legalized same-sex marriage is more real—and more radical—than they may have yet realized.
Why Churches Should Be Exempt
Churches in the United States received an official federal income tax exemption in 1894, and they have been unofficially tax-exempt since the country’s founding. All 50 states and the District of Columbia also exempt churches from paying property tax. Changing that status would have an immediate deleterious effect on churches and pastors, many of whom are already struggling financially.
A 2015 survey by the Hartford Institute for Religion Research found that almost one in five congregations (16 percent) suffer serious financial difficulty. Adding the burden of taxation would swiftly put them under. Additionally, revoking tax-exempt status would likely eliminate the “parsonage exemption” on ministers’ housing. This would cost American clergy members $2.3 billion over five years. And it would be damaging to pastors who make an average salary of $39,146 a year.
