Tax on churches looms, ERLC coalition urges repeal

By Tom Strode, Washington bureau chief for Baptist Press; photo Art Toalston, senior editor of Baptist Press on November 14, 2018

WASHINGTON (BP) -- A diverse coalition led by the Southern Baptist Ethics & Religious Liberty Commission has urged members of Congress to repeal a section of a federal law that could force churches to file tax returns for the first time in American history.

The ERLC -- joined by 32 other organizations -- sent a letter Nov. 13 to leaders of two congressional committees and some other members of Congress asking them to rescind before 2019 a provision in the Tax Cuts and Jobs Act, which took effect Jan. 1 of this year.

Without repeal, the cost to the charitable sector would be a congressionally estimated $1.7 billion over 10 years, the religious groups and nonprofit organizations said in the letter.

The provision -- Section 512(a)(7) -- requires houses of worship and non-profits to pay a 21 percent tax on such employee benefits as parking and transportation. The measure not only imposes a new tax hardship on churches and nonprofits but imposes on them "burdensome accounting and regulatory compliance costs," according to the ERLC-led letter.

The ERLC and its allies say the provision "will hopelessly entangle the [Internal Revenue Service] with houses of worship, simply because these houses of worship allow their clergy to park in their parking lots."

ERLC President Russell Moore said in a news release, "Churches ought not be seen by the government as untapped sources of tax revenue. While the effect of this section of the tax code may very well have been unintended, it must be remedied.

"As the American founders clearly understood, the power to tax is the power to destroy," Moore said. "The proper separation of the state from the church is at the heart of our American project. This section of the tax code, however, blurs those lines in harmful ways."

In the letter, the coalition said the First Amendment is the basis for not requiring houses of worship to file tax returns. "This policy allows houses of worship to operate independently from the government and shields houses of worship from government interference and intrusive public inspection into their internal, constitutionally protected" activities, according to the letter.

In addition to Moore, the letter's signers included Leith Anderson, president, National Association of Evangelicals; Daniel DiNardo, archbishop, Galveston-Houston, and president, U.S. Conference of Catholic Bishops; Erik Stanley, senior counsel, Alliance Defending Freedom; David Nammo, chief executive officer (CEO), Christian Legal Society; Jerry Johnson, president, National Religious Broadcasters; Dan Busby, president, Evangelical Council for Financial Accountability; Shirley Hoogstra, president, Council for Christian Colleges and Universities; Donna Markham, president, Catholic Charities USA; Nathan Diament, executive director for public policy, Union of Orthodox Jewish Congregations of America; Anwar Khan, president, Islamic Relief USA; Gerald Causse, presiding bishop, The Church of Jesus Christ of Latter-day Saints; Jerry Silverman, CEO, The Jewish Federations of North America; and Michael Smith, president, Home School Legal Defense Association.

The coalition addressed the letter to Sens. Orrin Hatch, R-Utah, and Ron Wyden, D-Ore., chairman and ranking member, respectively, of the Senate Finance Committee, and Reps. Kevin Brady, R-Texas, and Richard Neal, D-Mass., chairman and ranking member, respectively, of the House Ways and Means Committee.

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