The Church and the IRS

In the comment thread of my previous post, CatherineD wrote:

Well, let's talk about the bishops. If they're writing and/or directly influencing legislation, then they no longer qualify as 501(c) tax exempts. Let the IRS go for broke now.

For our overseas friends who may not know: that tax-exempt status in the US means that an institution cannot lobby or take a position on legislation. I experienced this in my own humble way as editor of The American Prospect, which is a c3 magazine.

We couldn't take a position on a particular piece of legislation, which was hard for an opinion journal. There were legitimate workarounds -- for example, we could write articles describing why the general idea of, say, Social Security privatization was a bad one.

But if there'd been a specific bill that came up for a vote, TAP could not have written an editorial saying vote for or against this bill. That would have constituted lobbying under IRS rules.

Now a church isn't exactly a magazine. But if I'm not mistaken, essentially the exact same anti-lobbying rules apply. Tax-exempt groups can't lobby. Again, we get into this area we were discussing yesterday, because such activity amounts to an indirect subsidy by all taxpayers of a particular political position.

Now read this Politico story, a fine tick-tock about how Pelosi came to allow a vote on Stupak. Check this out:

The drama had built for months, pitting a group of Democrats against the Catholic Church. Priests and bishops were calling members to lobby for stricter language to limit abortion coverage, members and aides said last week.

Calling members to what? I urge you to read the entire piece. If it is correct, you will see that the bishops were evidently involved in demanding and negotiating minutae like specific language. Take note of how many grafs discuss what the bishops did and didn't do, would and wouldn't accept.

Now, liberal Congresswoman Lynn Woolsey has called outright for the IRS to review the Church's status.

As a real-world matter it's impossible to imagine this really going anywhere, especially while the bill's fate is in play. But progressive groups -- many c3s, bound by the very same restrictions the Church appears to have flaunted here -- ought at least to make noise about it.

UPDATE: The church's lobbying arm is legal, as this correction explains.

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