Taxes And Religious Institutions

[Carl Harry Carlson]

Ahem. Money paid to political organizations is not tax deductable by individuals.

But it is deductable by corporations, because it is considered a business expense.

Donations made to any organization that does not have charitable (501 C3 ) status with the IRS are not deductable. An organization can be not-for-profit but not a charity. Unions are not charitable organizations.

However, union dues are a business expense and therefore deductable if the union member itemizes deductions on their tax return.

Disclaimer: I'm not an accountant, that's just my understanding of the tax laws.

Edited February 19, 2012 by Carl Harry Carlson

[Bro. Hex]

I find the "prosperity gospel" to be offensive to my sense of "right and wrong".

For me, it is one of the best reasons I can think of to avoid all things "biblical".

[mdtaylor]

Ahem. Money paid to political organizations is not tax deductable by individuals.

But it is deductable by corporations, because it is considered a business expense.

Political contributions are not a business expense. And the only way it would be possible, and this is even a stretch, is that politics IS your business and the expense is to an organization that provides a good or service that is somehow germain to your business.

[Bro. Hex]

Political contributions are not a business expense. And the only way it would be possible, and this is even a stretch, is that politics IS your business and the expense is to an organization that provides a good or service that is somehow germain to your business.

Mark is correct. Political contributions are not a tax deductible expense for corporations.

[Carl Harry Carlson]

Hex, Mark, I'm not sure you are correct. I'm going to hold off on this until I get a little more information.

If I am running a corporation and I spend money for lobbying or contribute to a Politiacl Action Committee ("PAC," which is now permitted due to the Supreme Court ruling on this issue), you damn well can bet I will show those expenditures as expenses on my books. Hex, Mark, please supply some reference material.

The law is clear, however, that individuals may not deduct political contributions.

[mdtaylor]

Political contributions. Contributions or gifts paid to political parties or candidates are not deductible. In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible.

Indirect political contributions. You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. Examples of nondeductible expenses include the following.

• Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate.
  
• Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate.
  
• Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate.
  

http://www.irs.gov/p.../p535/ch11.html

But this topic is not about whether they are or are not presently deductable. This topic is about whether or not they should be. Let's not get into a debate here.

[Carl Harry Carlson]

Hi md,

Thank you for the IRS tax info.

I think the information you supplied applies to individuals, not, say, corporate financial support of Political Action Committees (PACs).

This detail is important and relevant to a discussion of donations and taxation because of the landmark 2010 U.S.Supreme Court ruling that now allows corporations, unions, and even 501 ( c ) ( 3 ) charitable organizations, including religious organizations, to give unlimited financial support to PACs of any type, which can then be used to influence elections at any level. (The "Citizens United" case.)

Giant sponsored PACs ("super-PACs") buy millions and millions of dollars of advertising every month to influence your thinking and mine on a variety of political issues.

You don't have to watch TV or read a magazine or cruise the internet for very long before you are until you get a message paid for by a PAC.

A PAC is not supposed to "co-ordinate" its activities with a political party or candidate, but many PACs are run entirely by former staffers of those people. Co-inkydink? Of course not.

And to my knowledge, those payments from corporations are considered legitimate business expenses.

But when individuals like you and I contribute to a PAC, we have to use our after-tax dollars. That puts corporate-financed PACS at an advantage, if they are posting their expenditures as business expenses (which I still am assuming they are).

Frankly I need an accurate answer to this question before I go shooting off my mouth again on the subject.

Edited February 20, 2012 by Carl Harry Carlson

[mdtaylor]

Hi md,

Thank you for the IRS tax info.

I think the information you supplied applies to individuals, not, say, corporate financial support of Political Action Committees (PACs).

There here is another quote from the same document.

Introduction

This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication.

[Dorian Gray]

MD,

Is that personal business expenses (like my subscription to the AF Times) or the business's expenses (like rent/ulitities, etc).

[mdtaylor]

It is for businesses. Go to the IRS website. Select Businesses. Then Select Business Expenses. You will find Publication 535.

[Hyper Real]

Political contributions is an interesting topic, certainly I would not want to have a system where only the rich can afford to run a campaign. With the same argument I find it important to give those elected a decent salary.

[Dorian Gray]

Political contributions is an interesting topic, certainly I would not want to have a system where only the rich can afford to run a campaign. With the same argument I find it important to give those elected a decent salary.

You mean the current system?

[Hyper Real]

You mean the current system?

Partly yes.

What I think we need is capable administrators, people who do not use cheap rhetoric to get their votes but with that we need an educated constituency. Education is key here, it should start at school, education, student school boards, community services etc.

[mererdog]

Personally, I believe that the you cannot have freedom without equality. By that token, religious freedom requires religious equality. As such, qualities of a religious nature should not be compared to decide who does and does not get taxed. To do otherwise allows for using tax laws to "encourage" people to practice their religion in approved manners. As when a church is told that if it's preacher continues to say certain things they may find themselves being audited and paying tens of thousands in back taxes....

Edited February 21, 2012 by mererdog

[Bro. Hex]

No one is forcing the religious institution to claim tax exemption.

If the institution chooses to seek a tax exemption,

then it must play by the rules that apply to that exemption.

If it wants to say whatever it wishes from the pulpit,

then it chooses to pay the price for its actions.

That is what adults do.

If it "wants what it wants when it wants it"

and without paying the price...

then it is behaving precisely like a two-year old.

Edited February 21, 2012 by Hexalpa

[mererdog]

No one is forcing the religious institution to claim tax exemption.

That is a valid point. At the same time, no one forced Rosa Parks to ride a bus, right?

[Dorian Gray]

Religious organizations are automatically tax exempt (federally). It is only during an audit that if they dont meet enough of the 14 point do they get disqualified or if they get a pre-determination done.

[Bro. Hex]

That is a valid point.

At the same time, no one forced Rosa Parks to ride a bus, right?

That is absolutely correct.

Rosa knew the risk she was taking, and decided to act in accordance with her beliefs, no matter the consequence.

In short, Rosa was a courageous and principled adult, willing to risk all for something she believed in.

[Bro. Hex]

Religious organizations are automatically tax exempt (federally)...

That's an interesting belief that you have there.

But I happen to know that you are incorrect, as I am a corporate officer in a Church that is a regular corporation,

incorporated under the laws of the State of Ohio, and we are NOT tax exempt at the federal level, and never have been.

We didn't request anything.

We didn't get any "pre-determination".

We simply chose not to request Section 501 © (3) status.

(One has to request that status)

We chose not to make that request because of our preference for unfettered free speech.

Contrary to your claim, tax-exempt status is NOT automatic.

[Hyper Real]

But I happen to know that you are incorrect, as I am a corporate officer in a Church that is a regular corporation,

incorporated under the laws of the State of Ohio, and we are NOT tax exempt at the federal level, and never have been.

We didn't request anything.

We didn't get any "pre-determination".

We simply chose not to request Section 501 © (3) status.

(One has to request that status)

We chose not to make that request because of our preference for unfettered free speech.

Contrary to your claim, tax-exempt status is NOT automatic.

Good point, I believe many people do not realize that when your organization opts to become a section 501 entity there are restrictions it must adhere to.

In the very unlikely event I would create a religious entity I would certainly not opt to become a section 501 entity.

Edited February 21, 2012 by hyperreal