The Wisconsin-based Freedom from Religion Foundation (FFRF) has filed a lawsuit with the Internal Revenue Service that raises an interesting question. The group challenges the government’s different treatment of religious and non-religious non-for-profit organizations. While tax-exempt 501(c)(3) nonprofit organizations must file a detailed application form, fee and annual information to obtain and maintain their tax-exempt status, churches and other religious organizations are exempted from the requirement to file the reports and fees. The lawsuit alleges that the added expensive and detailed paperwork is a form of discrimination against non-religious groups.

The lawsuit does raise a valid question of why such forms are not uniformly required or waived for all groups. An atheist group is presumably not treated as falling under a religious exception despite that fact that it is an alternative to such faith organizations. The lawsuit alleges that “[t]he preferential treatment provided to churches and other affiliated religious organizations constitutes an exclusive and discriminatory benefit to religion in violation of the Establishment Clause, as well as the equal protection rights required by the Due Process Clause of the Fifth Amendment to the United States Constitution,” states the lawsuit filed Thursday in U.S. District Court in Madison.

The lawsuit seeks a court order to stop the IRS “from continuing to exempt churches and other affiliated religious organizations from the application and annual information filings required of all other non-profit organizations under §501(c)(3).”

Notably, the IRS Commissioner is accused of a non-enforcement policy with regards to electioneering by churches:

In fact, however, the Internal Revenue Service, under the direction of the
Defendant Shulman, has followed and continues to follow a policy of non-enforcement of the
electioneering restrictions of §501(c)(3) against churches and other religious organizations.
22. As a result, in recent years, churches and religious organizations have been
blatantly and deliberately flaunting the electioneering restrictions of §501(c)(3), including during
the presidential election year of 2012. Illinois Bishop Daniel Jenky, for example, required that a
partisan letter be read by every celebrating priest in the diocese to congregants the weekend
before the recent Presidential election.

What do you think?

Here is the lawsuit.

COMPLAINT
The Plaintiff, Freedom From Religion Foundation, Inc., as its Complaint against the
Defendant, Douglas Shulman, Commissioner of the Internal Revenue Service, alleges as follows:
1. The Plaintiff, Freedom From Religion Foundation (“FFRF”), seeks a Declaration
under 28 U.S.C. §2201 that the Defendant, Douglas Shulman (“Shulman”), in his capacity as
Commissioner of the Internal Revenue Service (“IRS”), has violated, continues to violate, and
will continue to violate in the future, the Establishment Clause of the First Amendment to the
Constitution of the United States by failing to enforce the electioneering restrictions of
§501(c)(3) of the Tax Code against churches and religious organizations. The Defendant’s
actions also violate the Plaintiff’s Equal Protection rights.
2. Plaintiff requests the Court to enjoin the Defendant Shulman from continuing a
policy of non-enforcement of the electioneering restrictions against churches and religious
organizations. The Plaintiff also requests the Court to order the Defendant to authorize a high
ranking official within the IRS to approve and initiate enforcement of the restrictions of
§501(c)(3) against churches and religious organizations, including the electioneering restrictions,
as required by law.
3. This Court has federal question jurisdiction pursuant to 28 U.S.C. §1331 with
respect to the relief sought against the Defendant Shulman. The Court also has the authority to
issue a declaratory judgment under 28 U.S.C. §2201. The Court further has the authority to
award injunctive relief under 28 U.S.C. §1443 and Fed. R. Civ. P. 65.
4. The United States has waived sovereign immunity, pursuant to 5 U.S.C.§702, for
actions that seek specific relief other than money damages, as in this case.
5. Venue is appropriate in the District Court for the Western District of Wisconsin
pursuant to 28 U.S.C. §1391(e), where FFRF has its principal office.
6. The Plaintiff is a tax-exempt non-profit organization under §501(c)(3) of the Tax
Code, and as such, FFRF must and does abide by the electioneering restrictions of §501(c)(3).
7. The Plaintiff is a non-profit membership organization that advocates for the
separation of Church and State and educates on matters of non-theism. The Plaintiff has more
than 19,000 members, residing in every state of the United States, as well as the District of
Columbia.
8. FFRF represents and advocates on behalf of its members throughout the United
States.
9. FFRF’s membership includes individuals who are federal tax-payers who are
opposed to government preferences and favoritism toward religion.
10. The Defendant Shulman is the Commissioner of the Internal Revenue Service,
with a principal address of 1111 Constitution Avenue N.W., Washington, D.C. 20224; the
Defendant Shulman is sued in his official capacity.
11. The Establishment Clause of the First Amendment to the United States
Constitution prohibits governmental preference for, endorsement of, and discrimination in favor
of religion.
12. Section 501(c)(3) of the Tax Code prohibits all non-profit organizations,
including churches and other religious organizations, from intervening in political campaigns as
a condition of their tax-exempt status.
13. All organizations that are recognized as exempt from federal income tax under
§501(c)(3) of the Tax Code are subject to the prohibition against political campaign intervention.
14. All organizations, including churches and religious organizations, that are exempt
from federal income tax under §501(c)(3) of the Tax Code are prohibited from participating or
intervening, directly or indirectly, in political campaigns on behalf of or in opposition to any
candidate for elective public office.
15. The restrictions of §501(c)(3) on electioneering activities do not preclude
discussions of issues that are not linked to support for or opposition to candidates; the fact that
candidates may align themselves on one side or another of an issue does not restrict the ability of
religious organizations to engage in discussions of that issue.
16. A discussion of issues violates the electioneering restrictions of §501(c)(3) of the
Tax Code if the discussion contains overt support for or opposition to a particular candidate.
17. Factors relevant to determining whether an advocacy communication constitutes
impermissible campaign intervention include: (a) whether the communication identifies one or
more candidates for a public office; (b) whether the communication expresses approval or
disapproval of one or more candidates’ positions and/or actions; (c) whether the communication
is delivered close in time to an election; (d) whether the statement makes reference to voting or
an election; and (e) whether the issue addressed in the communication has been raised as an issue
distinguishing candidates for a given office.
18. The electioneering prohibition of §501(c)(3) applies to tax-exempt organizations,
including churches and religious organizations, and to the actions of individuals, including clergy
or other religious leaders, acting as representatives of tax-exempt organizations; the prohibition
of §501(c)(3) does not apply to the political activities of clergy or other religious leaders
undertaken in their individual capacities.
19. The Internal Revenue Service follows special procedures before commencing
inquiries about potential violations of §501(c)(3) by a church or religious organization.
20. The IRS may initiate a tax inquiry of a church or religious organization if a highranking
IRS official documents in writing the acts and circumstances, including potential
violations of the electioneering prohibition, that lead the official to reasonably believe that the
Church may have violated the requirements for tax exemption under §501(c)(3).
21. In fact, however, the Internal Revenue Service, under the direction of the
Defendant Shulman, has followed and continues to follow a policy of non-enforcement of the
electioneering restrictions of §501(c)(3) against churches and other religious organizations.
22. As a result, in recent years, churches and religious organizations have been
blatantly and deliberately flaunting the electioneering restrictions of §501(c)(3), including during
the presidential election year of 2012. Illinois Bishop Daniel Jenky, for example, required that a
partisan letter be read by every celebrating priest in the diocese to congregants the weekend
before the recent Presidential election.
23. More than 1500 clergy reportedly also violated §501(c)(3) on October 7, 2012, in
a deliberate and coordinated display of noncompliance with the electioneering restrictions of
§501(c)(3), including prominent megachurches.
24. The Billy Graham Evangelistic Association ran blatantly partisan full-page ads in
October of 2012 in the Wisconsin State Journal; the Ministry also ran ads in the New York Times,
USA Today, the Wall Street Journal, and more than a dozen national and battle ground state
newspapers before November 6, 2012. The Association also published expressly partisanship
matter on its website at http://www.billygraham.org.
25. Open and notorious violations of the electioneering restrictions of §501(c)(3) by
churches and other religious organizations have been occurring since at least 2008, with churches
recording their partisan activities and sending the evidence to the IRS.
26. The Internal Revenue Service, however, under the direction and leadership of the
Defendant Shulman, is following a policy and practice of non-enforcement of §501(c)(3) against
churches and religious organizations.
27. The IRS, under the direction of Defendant Shulman, on information and belief,
has failed even to designate an official with authority to initiate enforcement of §501(c)(3)
against churches and other religious organizations.
28. The non-enforcement of the electioneering restrictions of §501(c)(3) against
churches and other religious organizations constitutes preferential treatment to churches and
religious organizations that is not provided to other tax-exempt organizations, including FFRF,
which are required to comply with the electioneering restrictions of §501(c)(3).
29. The Defendant’s non-enforcement of §501(c)(3) as to churches and religious
organizations provides preferential treatment that is not neutrally available to other tax-exempt
organizations, including the plaintiff FFRF in this case.
30. The non-enforcement of §501(c)(3) as to churches and other religious
organizations by the IRS, under the direction of Defendant Shulman, directly benefits churches
and religious organizations, while discriminating against other non-profit organizations,
including the plaintiff FFRF, solely on the basis of religious criteria.
31. §501(c)(3), as administered by the defendant Shulman, provides preferential
treatment that is not neutral and generally applicable to all tax-exempt organizations.
32. The policy of non-enforcement of the electioneering restrictions of §501(c)(3) as
to churches and religious organizations, by the Defendant Shulman, violates the Establishment
Clause of the First Amendment.
33. The preferential treatment of churches and other religious organizations by the
Defendant results in obligations on secular non-profits, including the Plaintiff FFRF, that are not
imposed on churches, which distinction arises exclusively from the application of religious
criteria.
34. The Plaintiff is disadvantaged vis à vis churches and religious organizations by
the Defendant Shulman’s policy of non-enforcement of the electioneering restrictions against
churches and other religious organizations.
35. Churches and religious organizations obtain a significant benefit as a result of
being non-exempt from income taxation, while also being able to preferentially engage in
electioneering, which is something secular tax-exempt organizations cannot do.
36. The preferential tax-exemption that churches and other religious organizations
obtain, despite noncompliance with electioneering restrictions, amounts to more than
$100,000,000,000 annually in tax-free contributions made to churches and religious
organizations in the United States.
37. The policy and practice of non-enforcement of electioneering restrictions against
churches and religious organizations by the Defendant Shulman and the Internal Revenue
Service confers benefits solely on the basis of religious criteria, on the basis of which the
Plaintiff FFRF does not qualify solely because of the application of religious criteria.
38. As a result of the discriminatory administration of §501(c)(3) by the Defendant
Shulman and the IRS, the Plaintiff FFRF seeks equal treatment herein in the form of a level
playing field, including by denying such preferential treatment to churches and religious
organizations.
39. The Defendant’s policy of non-enforcement of electioneering restrictions against
churches and other religious organizations has the effect each year of excluding billions of
dollars from taxation and this exclusion is available only to churches and religious organizations
with the concomitant right to also engage in electioneering activities.
40. The tax benefits preferentially provided to churches and other religious
organizations constitute an exclusive and discriminatory subsidy to religion in violation of the
Establishment Clause and the Equal Protection Clause of the United States Constitution.
WHEREFORE, the Plaintiff FFRF demands judgment against the Defendant Shulman and
the IRS as follows:
a. Declaring that the policy of the Internal Revenue Service, under the direction
of Defendant Shulman, violates the Establishment Clause and the Due Process
Clause of the United States Constitution by providing preferential treatment to
churches and religious organizations;
b. Enjoining the Defendant Shulman, and the Internal Revenue Service, from
continuing to allow preferential and discriminatory treatment under
§501(c)(3) of the Tax Code exclusively to churches and religious
organizations;
c. Ordering the Defendant Shulman and the IRS to forthwith comply with
necessary steps to designate an IRS official legally authorized to initiate
action against churches and other religious organizations that are reasonably
believed to have violated the electioneering restrictions of §501(c)(3);
d. Awarding the Plaintiff its reasonable costs and disbursements of this action as
allowed by law;
e. Awarding such other relief as the Court deems just and equitable.
Dated this 13th day of November 2012.
BOARDMAN & CLARK LLP

Source: Raw Story