The Chairman's Report June 5 2020

The Chairman's Report June 5 2020
Photo Credit: Steve Hayes by is licensed under
Religion, Churches &
The FAIRtax

During the time of the American Revolution and the adoption of the Constitution in 1788, religion was such an important element in American life, few even considered it was a right which needed to be protected.  Although not part of the original Constitution, The first ten amendments were submitted to the states on September 25, 1789 and adopted on December 15, 1791.  The one which directly applies to religion is the First Amendment which states:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances"

Prior to the introduction of the federal income tax in 1913, there was no reason for the federal government to “regulate” the activities of churches or other charitable organizations.  No income was taxed and there were no deductions for the organization or its donors.

After 1913, this started to change.  Like most things associated with the income/payroll tax system, a church or other charitable organization no longer escaped the attention of the federal government and its army of bureaucrats within the IRS.

How Does The IRS Define A Church?

The short answer is it doesn’t.  A church is just one of a number of entities for which there is no specific definition in the Internal Revenue Code.  The IRS simply says a church must be a corporation.  That’s it.  As the bureaucrats like to do, they have developed some very general points they believe a “church” must have to be tax-exempt.

IRS Publication 1828, Tax Guide for Churches & Religious Organizations, lists 14 criteria.  They are:

1.  A distinct legal existence
2.  A recognized creed and form of worship
3.  A definite and distinct ecclesiastical government
4.  A formal code of doctrine and discipline
5.  A distinct religious history
6.  A membership not associated with any other church or denomination
7.  An organization of ordained ministers
8.  Ordained ministers selected after completing prescribed studies
9.  A literature of its own
10.  Established places of worship
11.  Regular congregations
12.  Regular worship services
13.  Schools for the religious instruction of the young
14.  Schools for the preparation of ministers

The above points aren’t specific but can be interpreted differently by different reasonable people.  Therefore, IRS bureaucrats can decide a specific “church” isn't really a church.  In that case, they can decree donations to that church aren’t tax deductible, and those donations are actually income to the organization on which taxes must be paid.

Often, challenging their decree entails a long and costly legal battle, something most churches can’t afford to pursue.

In addition, there are special rules for clergy and for income earned by churches from various activities.  Like most aspects of the Internal Revenue Code, these provisions are very complicated and many are general and subject to different interpretations by different IRS agents.

The Johnson Amendment

To help stop attacks against his political campaign from religious groups, then Senator Lyndon Johnson pushed through the following 1954 amendment to IRS Code 501(c)(3);
"and which doesn’t participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office".

While the IRS has actually revoked the tax-exempt status of only a very few religious groups, the threat is always there.  Many leaders of religious groups and other tax-exempt groups have been reluctant to become involved in political campaigns that may directly affect their charitable purpose.  They’re afraid to openly support candidates who favor the positions advocated by the exempt organization because they fear in doing so could cost them their tax-exempt status.

As is the case in so many areas, the problem isn’t The Johnson Amendment has actually been used to stifle the free speech rights of non-profit groups, particularly churches and religious groups.  The problem is politicians and bureaucrats who disagree with an organization’s message can use the threat of action against them to intimidate these groups into silence.

As countless non-profits found out in the Lois Lerner Tea Party Scandal, IRS bureaucrats often let their own personal biases, or the biases of their superiors, affect their official actions.  And unfortunately, they often get away with it.

Take the example of a small church.  Prior to the Johnson Amendment, if one candidate shared the church’s beliefs on an important issue and the opposing candidate held the opposite view, the minister was free to speak out and urge his congregation to support the candidate who agreed with the church’s position.

The Minister saw how Pastor Wright got away with endorsing Barak Obama from the pulpit in sermons that were widely broadcast and no one tried to revoke that church’s tax exemption.  But he also saw how Lois Lerner made life difficult for organizations she didn’t like.

Knowing his is a small church that doesn’t have the resources to fight the IRS, the Pastor decides against saying anything in support of the candidate who shares the church’s belief.  The Johnson Amendment has intimidated him into silence.

In truth, The Johnson Amendment is just another example of the Ruling Class and their minions exerting control over the rest of us for their own benefit.
How The FAIRtax Will Treat Churches

With The FAIRtax, most of the complications dealing with churches and other tax-exempt organizations will be eliminated.  Donations made to legitimate charitable organizations and churches AREN'T subject to The FAIRtax.  Since the income tax is gone, there will be no reason to be tax-exempt other than being able to receive donations without requiring the FAIRtax be collected on them.

Yes, there will still be requirements to qualify as a charity or church, but it will be much, much simpler.  In fact, most of the requirements will be to ensure the “churches” or other charitable organizations aren't improperly competing with regular businesses.

For, example,  it would be unfair if a church or other charitable group decided to start a grocery store to compete with other grocery stores but had the advantage of not charging The FAIRtax a regular grocery store would charge.

As Thomas Paine said, “Spiritual freedom is the root of political liberty...As the union between spiritual freedom and political liberty seems nearly inseparable, it’s our duty to defend both”.

George Washington said, “Religion and morality are the essential pillars of civil society”.

Does this mean if you favor religious freedom you should support The FAIRtax? No, you should support The FAIRtax because it not only helps protect your religious freedom but it’s also good for the economy which is good for all of us.

The other reason to support The FAIRtax is it will force the Ruling Class and their army of bureaucrats to do things in the open for everyone to see.  Today, no one really sees how they use the tax code to reward their friends, punish their enemies and control us all.  They hide their actions in the largely incomprehensible  IRS rules and regulations few even know exist.
We all know cockroaches scatter when the lights come on.  Replacing the Federal income tax code with The FAIRtax would be like turning on a huge searchlight.  The people trying to control us could no longer do it under the cover of darkness provided by the income/payroll tax system.
If you are ready to take a very significant step toward wresting control of your government back from a small group of corrupt people to make it possible for all of us to prosper, Go to our Homepage NOW, sign up to "Get-Updates", join with us to TAKE BACK CONTROL!
Demand Congress to pass The FAIRtax—the only “Fair tax”!

The author George Bernard Shaw said these words in a play he wrote, You see things; and you say “Why?”  But I dream things that never were; and I say “Why not?”

Isn’t it time for us to ask, “Why not?” 

President Trump, “Embrace The FAIRtax, the only real tax reform!  Stand up to the Swamp.  They will oppose you anyway because they see you as a threat.  What have you got to lose?”

The truth is the truth!  Remember, if we don't continue to tell the truth and demand a change, then George Orwell's "1984" quote may foretell our children's future: “If you want a picture of the future, imagine a boot stamping on a human face, forever"
Thank you for staying FAIRtax strong!
Yours In Liberty!   Yours In Freedom!

Steve Hayes
Chairman, Americans For Fair Taxation

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