Would The Church Losing Its Tax-Exempt Status Be Such a Calamity?


I hope they will not come upon us now.
We are in God’s hand, brother, not in theirs.
March to the bridge; it now draws toward night:
Beyond the river we’ll encamp ourselves,
And on to-morrow, bid them march away.

                                                                  Henry V, William Shakespeare

In the wake of the Supreme Court’s decision on the Obergefell vs.Hodges, a major and well funded campaign began to encourage the IRS to revoke the tax-exempt status of the Catholic Church and other non-profit organizations that oppose homosexual marriage. This has caused alarm among Catholic groups like The Catholic League, whose director Bill Donohue warns:

“Anyone who thinks that radical activists will stop with gay marriage is ignorant: The big prize has always been to force the churches to fall in line. …Stealth politics is what the left is good at, and on this issue they will have their unelected surrogates at the IRS do their bidding.”

From a purely financial standpoint the answer to the question posed above is probably yes, it could be a calamity, particularly with regard to a levy on Church property. Yet knowing the true financial impact on the Church would require an in-depth analysis by a major accounting firm. The USCCB might be wise to commission such a study. A lot of dioceses in America are in bankruptcy and if the Church were to be taxed like a corporation she could do what most corporations do to reduce or eliminate their tax obligations. Perhaps it wouldn’t be as bad as one might think. And then there’s the question of whether parishioners would reduce their giving or stop tithing at all, since the tax-deductability of their contribution would be eliminated. Conducting a broad survey on that question might also be wise.

Some think that the government’s removing of the Church’s tax-exempt status is very unlikely. Since the question of homosexual marriage is a religious matter for the Church, it would be seen as a violation of the First Amendment and be quickly overturned by the courts. (Although, in 1976 the IRS successfully took Bob Jones University’s tax-exempt status away because it had a policy against interracial marriage). Others suggest that the political party in power at the time of such a decision would be too fearful of suffering a backlash at the ballot box and they would elect to back off.


Away from the financial picture, however, let’s ask, how would the increased tax burden affect the spirituality of the Church? Well, let’s consider what non-profits like the Catholic Church are currently prohibited from doing (according to the IRS):

…[O]rganizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. 

I find appealing one of the possible results of stripping the Church of its tax-exempt status, as stated in an article from Catholic World Report:

“Without the limitations imposed by tax-exemption, what exactly would stop the churches from endorsing candidates from the pulpit, making financial contributions to campaigns, holding political rallies in church buildings, and engaging in nonstop lobbying?”  

However, wouldn’t such a situation obviously create a major division in the American Church? Recall that roughly half of all Catholics voted for Barack Obama in both elections, a candidate who one bishop described as “vicious” in his zealous support for abortion. Yet if the Church was free to endorse specific candidates, and from the pulpit, who would control to whom the endorsement, and active campaigning, would go? This is a predicament for the Church in America that I, admittedly, would be curious to see played out.


Emperor Domitian

There is a touching story from 4th century Church historian Eusebius of Caesarea’s History of the Church about two of Our Lord Jesus’ relatives who were summoned before Emperor Domitian during the great persecution, who had ordered a death sentence on anyone descended from the Davidic line (ca. 90 A.D.):

“…he asked them if they were descendants of David, and they confessed that they were. Then he asked them how much property they had, or how much money they owned. And both of them answered, …a piece of land which contained only thirty-nine acres, and from which they raised their taxes and supported themselves by their own labor. Then they showed their hands, exhibiting the hardness of their bodies and the callousness produced upon their hands by continuous toil as evidence of their own labor. And when they were asked concerning Christ and his kingdom, of what sort it was and where and when it was to appear, they, answered that it was not a temporal nor an earthly kingdom, but a heavenly and angelic one, which would appear at the end of the world, when he should come in glory to judge the quick and the dead, and to give unto every one according to his works. Upon hearing this, Domitian did not pass judgment against them.”(Book 3, Chap. 20)

Eusebius reports that Domitian called off the persecutions as a result of this encounter. The Emperor had been extracting all the money he could from the infant Church, he was desperate because he had already spent all the money in the empire’s treasury. When he banished someone, as he did St. John, he would also appropriate their property and money. The point here is that the Church survived and grew at the same time that her financial resources were being systematically confiscated by the government.


At the other end of the spectrum consider the Catholic Church in Germany today, where the government still collects “church taxes” on its behaBishop Franz-Peter Tebartz-van Elst in a vintage BMW.lf. The “kirchensteuer” is required if you are a member of the Roman Catholic Church whether you attend church or not. If you voluntarily remove yourself from the tax role, you may be refused a Catholic wedding, communion, burial, etc.

Because of this the Church is very wealthy in Germany, but spiritually the Church is dying there, losing over 200,000 parishioners per year. This explains Why many of the bishops are so accommodating to secular culture; they want the money to keep rolling in. Remember the “Bishop of Bling” and his $300,000.00 fish tank?

I think the Church here in the U.S. should consider voluntarily giving up its tax-exempt status and say, like King Henry, who ended up slaughtering the French at Agincourt in 1415, “we are in God’s hand, brother, not in theirs.”



5 thoughts on “Would The Church Losing Its Tax-Exempt Status Be Such a Calamity?

  1. Unfortunately, in Texas – due to the lack of a state income tax – we have an outrageously high property tax. If your house is valued at the average of $200k or so, your property tax bill is around $6,000 per year. Imagine the property value of a church, and the property tax on it! If the Church’s tax exempt status is removed, every single Church in the state of Texas will have to close its doors.


  2. But property tax is a State law creature, not a federal one (at least not yet). The IRS cannot remove state tax exemption status. Thus, conceivably, the IRS could remove federal income tax exemption, but Texas could still maintain state property tax exemption. Politically, it would likely be suicide for either to remove tax-exempt status, at least for now.


  3. The Bob Jones case provides the pretext of compelling government interest. The reality is that most parishes could not sustain the burden, especially in locales where liberals would raise the taxes to a prohibitive level. It would mean the closure of many of our parishes. We would be told that we can worship in our churches, but have no churches to worship in. Then creative zoning laws can stop us from worshiping elsewhere. It would make the practice of religion virtually impossible while claiming that no one’s rights have been violated.

    This will happen.


  4. We are in God’s Hands. We need not worry…Just speak the truth and live by the truth with Truth…. And let the “chips fall” where they may. Seek first the kingdom of God and the rest will be given unto you.
    If it ever even came down to that which the commenter spoke, at least, (and at best!,), we would be doing and speaking God’s will and that is what God wants, no matter what! It’s the sniveling coward who adjusts his words and actions to worldliness in order to keep his money. He “takes the soup”, as the Irish say. How can we expect people to die for the “faith of our fathers”, (aka the Catholic faith), if they acquiesce to the culture of death in the littlest of things in FEAR over losing tax exempt status!?! Christ told us to “Be not afraid”! Listen to Saint Padre Pio and “Pray, Hope, and Don’t Worry.”


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