Rev. Jeremiah Wright’s Church May Have Tax Problems

Barack Obama’s Minister, Jeremiah Wright, may have gotten himself into hot water with the IRS. He recently spoke in favor of Obama and against Clinton from the pulpit, a violation of the tax-free status of his church. He may soon learn that the only biblical passage that the IRS endorses is Matthew 22:21: “Render onto Caesar the things that are Caesar’s and unto God the things that are God’s”

Wright has been a constant headache for Obama since he started his campaign. As discussed here, his race obsessive and inflammatory rhetoric has been cited by critics as worrisome given the pronounced role that Wright has played in Obama’s life.

This most recent speech, however, moves Wright’s controversy from the political to the legal realm. In what he called his final sermon last month, Wright seemed to beg the IRS to strip his church of its tax exempt status. It was not some close case of political speech. It was an outright stump speech given from the pulpit.

Wright insisted “There is a man here who can take this country in a new direction.” referring to Obama. He added “Barack knows what it means living in a country and a culture that is controlled by rich white people. Hillary would never know that. Hillary ain’t never been called a nigger. Hillary has never had a people defined as a non-person.”

Wright even compared Hillary and Bill. “Hillary is married to Bill, and Bill has been good to us. No he ain’t! Bill did us, just like he did Monica Lewinsky. He was riding dirty.”

For a clip, click here

For the full story, click here

The use of churches for political purposes has been an allegations often directed at the religious. For example, in 2005, a leading pastor was forced to resign after turning his church into a virtual Bush campaign headquarters. Baptist Rev. Chan Chandler was accused of running out nine church members who refused to support President Bush — and used his pulpit to support Bush. Click here.

In 2004, over 60 churches were investigated for such endorsements. Click here for an NPR story. The NAACP was also investigated for political activities opposed to Bush. Click here and here.

The IRS states the standard clearly:

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates. . .

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct.

Political activities are defined as follows:

Under the Internal Revenue Code, all section 501(c)(3) organizations 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. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise tax.

Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including the presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity.

In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not constitute prohibited political campaign activity if conducted in a non-partisan manner. On the other hand, voter education or registration activities with evidence of bias that: (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.

It seems pretty clear that Wright was favoring “one candidate over another” since he was trashing Hillary and heralding Obama. He was also “oppos[ing] a candidate” as well as having “the effect of favoring a candidate.” That makes it a perfect storm of violations of tax exempt status.

3 thoughts on “Rev. Jeremiah Wright’s Church May Have Tax Problems

  1. Odd that the IRS’s rules seem to be more stringent than the FEC’s when it comes to political communications. If I remember correctly, the FEC’s “magic words” test is still functionally intact after last year’s FEC v. Wisconsin Right-to-Life, unless the comments meet the McConnell standard of being “functionally equivalent” to campaigning and there is no other reasonable interpretation of the comments aside from the overt advocacy of a candidate (and I think there is some wiggle room, at least in the comments quoted above, to make the case that it wasn’t advocating Obama’s election).

    But it does pretty well indicate a pro-Obama bias.

    Jay Sekulow time: since federal tax laws are statutory, do you know of a precedent for challenging the restriction on political speech from the pulpit as an abridgment of First Amendment protections, in that it potentially causes clergy to abandon one civil liberty (free speech) in favor of protecting another (free exercise of religion)? I wouldn’t particularly like to see that case made, but I bet the arguments could be interesting.

    (Again, I ain’t no lawyer–other than this site and Volokh, my total legal education to-date consists of Jeffrey Toobin’s “The Nine,” Breyer’s “Active Liberty,” Dick Hasen’s “The Supreme Court and Election Law,” and a TiVo Season Pass for “Law & Order”)

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