Sunday, December 3, 2006

The Church & the Tax Exempt Status

It has been alleged that some church-related institutions are not faithful to the magisterium. Are these same institutions benefiting from tax exemptions? As per a recent NY Times series, tax exemptions may also be getting used in manners never imagined (See below excerpts.). Should Catholics encourage their bishops to forego exemptions, so as to avoid any inadvertent "handcuffs" to boldly proclaiming the truth? Is this too simplistic?
  1. Religious “organizations — from mainline Presbyterian and Methodist churches to mosques to synagogues to Hindu temples — enjoy an abundance of exemptions from regulations and taxes….new breaks come at a time when many religious organizations are expanding into activities — from day care centers to funeral homes, from ice cream parlors to fitness clubs….beyond the federal income tax exemption they share with all nonprofit groups, houses of worship have long been granted an exemption from local property taxes in every state” (Part 1: Favors for the Faithful, NY Times, 10/8/06).
  2. In “a 1979 decision…the United States Supreme Court ruled that the labor board’s jurisdiction did not extend to religious schools….The federal appeals court panel in Washington ruled that a three-prong test should be the labor board’s only standard for determining which schools were religious enough to be exempt from the nation’s collective bargaining laws….Any school that is nonprofit, has a religious affiliation and presents itself to the public as a religious institution must be exempted from jurisdiction, the court said….Of course, some casually faithful or broadly tolerant schools…would easily pass the court’s new test” (Part 2: Limiting Workers' Rights, NY times, 10/9/06).
  3. “As the Brothers of Holy Cross, a Roman Catholic religious order, sees it, providing the elderly with…a sense of security, social opportunities and various services to make independent living easier — is a charitable activity rooted in its pastoral mission to serve others. Members of the St. Joseph County Property Tax Assessment Board of Appeals, all but one of them lifelong Catholics, see it differently. To them, a charitable ministry does not consist of providing lovely retirement living to affluent people. The current residents of Holy Cross Village have an average net worth of $1 million….If Holy Cross Village is not taxed, members of the assessment board point out, a heavier burden will fall on the working families in the county that are struggling to pay the taxes on their small home" (Part 3: Giving Exemptions, NY times, 10/10/06)
  4. “the most valuable tax break available to ordained clergy members of all faiths: an exemption from federal taxes for most of the money they spend on housing, which typically represents roughly a third of their compensation….Ministers of every faith are also exempt from income tax withholding and can opt out of Social Security. And every state but one exempts religious employers from paying state unemployment taxes” (Part 4: The Personal Exemptions, NY Times, 10/11/06)
  5. “It looks like a business and, in many ways, acts like one. But it is beyond the reach of most of the rules and government oversight that apply to businesses — because it is a church mission. This is the ‘medical bill sharing ministry’ known as Christian Care Ministry…..ministry members — who must be observant Christians with recommendations from their pastors — write a check to Christian Care Ministry….the ministry writes checks to health care providers…to cover the medical bills submitted by its members….over the years, some state officials have looked at ministries like Christian Care and seen what they would call unregulated health insurance. Their concern is that confused consumers looking for low-cost coverage will rely on these groups as if they were insurance companies, even though the groups may lack the resources to pay a ministry of the American Evangelistic Association, which ordains clergy and supports various educational and humanitarian missions, Christian Care Ministry is not required to file public financial statements with the I.R.S”(Part 5: Ministry for Medicine, NY Times, 10/20/06).


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