Critics line up against the government’s plan to tax charities

Diana Clement

LawNews

April 23, 2025

A sweeping review of the taxation of New Zealand’s 29,000 registered charities has sparked widespread concern.

Proposals to tax not-for-profits’ business income if it’s unrelated to their charitable purpose – whatever that might mean as this term has not been defined – and tighten donor-controlled charity rules have left many questioning whether this is genuine tax reform or simply a government revenue-grab.

The IRD published its 24-page consultation document Taxation and the not-for-profit sector on February 24, with a tight deadline of March 31 for submissions.

The move has appealed to those who disapprove of the behaviour of charities such as Sanitarium, the Gloriavale Christian Community and Destiny Church, but critics say it’s not the job of the IRD and tax legislation to rein in these organisations and the proposals risk punishing legitimate charities with increased taxes and compliance costs.

Both the proposals and the short time frame for consultation have been criticised by the charity, legal and accounting sectors. Some see it as a tax grab by a government that needs to balance its books before next month’s Budget.

Tax reform of the charitable sector wasn’t part of National’s 100-day plan, but a paper prepared by the IRD for the previous government caught the attention of the coalition, says tax expert Stephen Tomlinson, a partner at Tomlinson Law and member of The Law Association’s Trust Law Committee. The consultation document was pulled together in weeks, he says, and the window to respond was short.

“One could be a little bit cynical about this in that it seems to be driven not so much by the Minister of Revenue but, rather, by the Minister of Finance, Tomlinson says. “It has been quite a condensed process and that concerns us.”

The proposals themselves are also a concern, particularly the plan to tax charities’ unrelated business activities. Even if the profit from unrelated businesses is used for charitable purposes, it will be taxed, along with returns from a charity’s investments.

“There used to be a presumption in charities law and tax law that a charity existed to further its charitable purposes and not to make money,” Tomlinson says.

The proposal to tax investment income is also fraught.

“More recent case law suggests that [the] Inland Revenue’s view is that the same principles that apply for determining whether a taxpaying citizen is carrying on a business [of investing] also apply to a charity. Presumably that will lead to a situation where some investment income is taxed and some still isn’t,” he said. The Catch-22 for charities is that there is an obligation for the trustees to invest prudently.

Tomlinson says unless there is a carve-out for investment income, the proposals will result in larger charities being taxed. “It’s got nothing to do with the perceived competitive advantage that charities enjoy over other businesses.”

If the proposals become law, there will likely be boundary issues for both charities and the IRD. These could be costly for both charities and the IRD as the legislation is tested in court.

Concerns about the behaviour of a small number of charities shouldn’t fall to the IRD to resolve, Tomlinson says. Unlike some overseas jurisdictions, New Zealand has a regulator – Charity Services – which monitors the sector.

The government is looking in the wrong place to balance its books, he adds, and there is a concern that New Zealand might end up “with a knee-jerk reaction …. reform driven by fiscal needs.

“If I were to draw a rather dangerous analogy, it’s a little bit like the Trump administration imposing tariffs without actually thinking through the fiscal effects of those and just thinking that it’s a good idea, based on inadequate research and understanding of these reforms.”

The other area of particular concern for Tomlinson is the taxation of not-for-profit organisations such as credit unions, friendly societies and clubs.

Not-for-profits should have been filing returns since 2004, but many smaller organisations are oblivious to this, Tomlinson says. He questions whether it is worth the time and effort to audit not-for-profits and collect this tax.

If not-for-profits are to be taxed, he recommends the $1,000 exemption, which was introduced in the late 1970s, be increased.

Limited consultation, significant change

Charities lawyer Sue Barker has written a 143-page submission repudiating much of the IRD’s consultation document. But she appeared stumped when asked why the IRD and/or government had come up with these proposals.

“It seems to be driven more by ideology,” Barker says. “The analysis is, ‘I run a business, and I pay tax. This business over here doesn’t pay tax. How can that possibly be fair?’”

The IRD has been trying to tax charities since1967, she said.  “And maybe [the IRD] thought with a right-wing government that perhaps this was its opportunity.”

At the same time, she says, officials have created a belief in the public’s mind that there’s something dodgy going on. “The underlying question as to whether there really is a problem that needs to be fixed, I don’t think it’s actually [been] asked.”

Barker said she couldn’t speak for the IRD or the government but thought the problem was that officials were working from underlying assumptions that hadn’t been properly examined.

Lawyers from all fields should also be concerned about the short timeframe of this consultation, Barker said. It could be repeated in other areas.

“They do this very limited consultation for the most significant change to the tax settings for charities in almost a century. They give charities just over four weeks that coincides with the end of the financial year for most charities. Why the rush?”

The international experience

Barker and others spoken to by LawNews point out that the consultation document assumes New Zealand is an outlier when it came to taxing charities, a subject Barker covers in her submission.

It was other countries that needed to look at this issue because their approaches had been shown not to work, she said. “Canada is looking to move to the way Australia and New Zealand treat their business income.”

She concluded, after an extensive review of overseas jurisdictions, that they serve as a cautionary tale rather than a precedent to be followed.

The concept of an unrelated business income tax had failed all over the world, Barker said. For charities, there is no bright line between a related and an unrelated business and attempts to draw such a distinction are fraught with difficulty that cannot be resolved.

“Outlier” charities that are breaching their fiduciary duties can be dealt with by using rules that are already in place, she said.

“My real concern is that the proposals will not address the perceived areas of concern but what they will do is impose blanket restrictions on the charitable sector as a whole which will stifle a lot of really important charitable work. It will also demoralise voluntary effort without addressing the perceived issues. Even if we had a problem, these measures wouldn’t fix it.”

Her submission outline reasons why the government should not remove the FBT (fringe benefit tax) exemption for charities. Barker said the policy rationale was that it enabled governments to further social objectives such as supporting disadvantaged communities. Removing this concession could negatively impact charities, especially those operating with limited resources. “[It] is an important support for charities that should remain in place for as long as the FBT regime itself remains.”

Charities already struggle to recruit labour and removing FBT exemptions would make it harder, Barker said.

Her submission also highlights imputation credits, which were not analysed in the consultation document. Charities cannot claim imputation credits, as other businesses can, and this affects the “competitive advantage” argument, Barker said.

This non-refundability distorts charity investment decisions, pushing them away from New Zealand companies (where dividends are taxed) and towards investments where their tax exemption is effective, such as interest-bearing debt or foreign companies offering unimputed dividends.

Costs, complications and unintended consequences

Chartered accountant Craig Fisher, an independent director and governance consultant and a former member of the ADLS (now The Law Association) council, acknowledges that objectives such as simplifying tax rules and addressing integrity risks are well-intended but warns the devil is in the detail.

He says the public does not understand the proposals outlined in the consultation document and believes them to be a fix for questionable behaviour by a small number of charities such as Destiny Church and the Gloriavale Christiab Community.

“Charity law is the most appropriate approach to maintain the social licence and public confidence of the charitable sector,” Fisher says. “If abuse of tax concessions is the primary issue, then resource the [Charity Services] regulator sufficiently to investigate and ensure it can take appropriate action.”

He adds that charities already face significant transparency requirements, including financial reporting and service performance reporting. These compliance costs are significantly greater than those for most for-profit entities, which often have no legislated obligations.

“The biggest issue with [the proposals] is the conceptual one in that it’s looking at the support of charities as a cost to the government, as lost revenue. Most studies would show that actually, charities are more effective deliverers of charitable services to society than the government is directly.”

Fisher says as it stands, the principles behind the consultation move New Zealand further away from its simple tax system. “As a rule, exceptions often create complications costs, and unintended consequences.”

He questions the financial analysis behind the IRD’s paper and says from an accounting perspective, it doesn’t add up.

“Late last year, Minister Willis [was quoted in] the press about the charity sector making $2 billion worth of profit that needs to be taxed. That’s a very simplistic statement. If the IRD starts taxing, then in order to be fair I would want, as an operator of a charitable business, to be claiming absolutely every expense that I could to reduce my tax liability. That’s what for-profit businesses do. That would dramatically change the potential level of taxation revenue to the government.

“Is my time worth $500 an hour? Or is it worth the minimum hourly rate?” says Fisher, who is on several charitable boards. “The cost of compliance for both the charities and the IRD would be huge if the proposals go ahead.

“I then have a major conceptual problem with the fact that the government, and not just this current government but repeated governments of all colours over the past 20 years, have made various statements about wanting the charitable sector to be sustainable and self-sustaining. Yet all the funding that charities get generally relies on the charity of others, apart from a charity actually running a business. It’s the only one where the charity has complete control over its own destiny.”

Fisher says he has not seen evidence of predatory pricing by charities or independent studies proving that this is a problem. Charities on the other hand face competitive disadvantages, such as restrictions on raising finance, the inability to claim imputation credits on tax-paid dividends and the inability to offset losses against future profits.

Read the consultation paper here https://www.taxpolicy.ird.govt.nz/-/media/project/ir/tp/consultation/2025/taxation-and-the-not-for-profit-sector.pdf

 https://lawnews.nz/tax/critics-line-up-against-the-governments-plan-to-tax-charities/

No, the IRS may not deny tax exemptions on the grounds that a group is a supposed 'hate group'

By Eugene Volokh
Washington Post
December 29, 2016

The Chronicle of Philanthropy writes:

The federal government has granted tax-exempt status to more than 60 controversial nonprofits branded by critics as “hate groups,” including anti-immigrant and anti-gay-rights organizations, white nationalists, and Holocaust deniers, according to a Chronicle of Philanthropy analysis.

The issue is a thorny one for the Internal Revenue Service, which must balance First Amendment rights against concerns that it is essentially granting government subsidies to groups holding views that millions of Americans may find abhorrent….

Though tax exemption is intended to be available to groups espousing a wide range of views, [Prof. Frances] Hill worries that the concept of a nonprofit organization has become too malleable. “The idea of tax-exempt organizations devoted to hate speech is just corrosive of everything that the tax-exempt sector says it stands for.”

Yet the IRS is in an impossible position, she said. Still shaken by the revelation that agency leaders had singled out conservative advocacy groups’ applications for tax-exempt status for extra scrutiny, the IRS has little incentive to investigate organizations based on the content of their messages.

Salon likewise writes:

Samuel Brunson, a tax law professor at Loyola University in Chicago, noted the nonprofit status gives these groups a veneer of legitimacy and respectability.

“It should make people uncomfortable that the government is subsidizing groups that espouse values that are incompatible with most Americans,” he said.

But the IRS can’t deny tax exemptions on the grounds that a group “hold[s] views that millions of Americans may find abhorrent” — or “espouse[s] values that are incompatible with most Americans” — whether those views are socialist, Islamist, pro-abortion, anti-abortion, pro-illegal-immigrant, anti-immigrant, pro-gay-rights, anti-gay-rights, white nationalist, black nationalist or anti-nationalist. It can’t deny exemptions to groups that engage in “hate speech” against blacks, gays, evangelical Christians or Donald Trump supporters, while allowing exemptions to groups that praise blacks, gays, evangelical Christians or Donald Trump supporters.

Indeed, the Supreme Court has made this clear: The government may not discriminate against groups based on the viewpoint of their speech. See Rosenberger v. Rector (1994) (discussing Regan v. Taxation With Representation (1983)). As the D.C. Circuit put it in Z Street v. Koskinen (2015) (itself a 501(c)(3) tax exemption case), “in administering the tax code, the IRS may not discriminate on the basis of viewpoint.”

There may be some confusion about this among some observers, because the government may limit certain tax exemptions based on the subject matter of groups’ speech; for instance, it may deny 501(c)(3) status, which allows tax-deductible contributions to various educational groups but not ones that support or oppose candidates for office, or engage in a substantial amount of advocacy for or against legislation. Likewise, groups can be denied benefits, including tax exemptions, because of their conduct (such as discrimination against members, students and the like), precisely because this discrimination is based on what the groups actually do, rather than based on what the groups advocate. See Bob Jones Univ. v. United States (1983); Christian Legal Society v. Martinez (2010) (upholding university’s denial of certain benefits to student groups that discriminate in certain ways, though reaffirming groups’ rights to communicate whatever viewpoints they want).

The D.C. Circuit, in National Alliance v. United States (1983), also upheld IRS guidelines that deny the educational tax exemption to groups that simply present “strong emotional feelings,” without an attempt to support their viewpoints with “a relevant factual basis”; I’m troubled by such a standard, which can easily be applied in biased ways. But even that decision defended the factual-support requirement on the grounds that it was a “criteri[on] neutral with regard to viewpoint.” And the decision noted that the requirement avoided a judgment on whether the factual argument was indeed accurate:

One of the concerns in this area, because of First Amendment considerations, is that the government must shun being the arbiter of “truth.” Material supporting a particular point of view may well be “educational” although a particular public officer may strongly disagree with the proposition advocated. Accordingly IRS has attempted to test the method by which the advocate proceeds from the premises he furnishes to the conclusion he advocates rather than the truth or accuracy or general acceptance of the conclusion.

So viewpoint discrimination in tax exemptions is unconstitutional, even if viewpoint-neutral subject matter or methodology restrictions — applied equally to “hate” groups as to love groups — are permissible.



Nor has the court been persuaded by the argument that tax exemptions, being economically similar to subsidies, can be denied to disfavored speakers. Indeed, in Rosenberger, the court made clear that even outright subsidies (there the payment of printing costs for student newspapers) can’t be denied based on viewpoint, so long as they are offered to a broad range of speakers based on generally applicable criteria. Does that mean that taxpayer money goes to speakers that many taxpayers disapprove of, whether those speakers are far left, left, center, right, far right, or something else? Yes — but the alternative is to give the government immense power to skew public debate. And even those who might in the abstract like the skewing of such debate against “hate speech,” whatever that might mean, ought to see that a government that can deny exemptions for “hate speech” groups can deny exemptions to any other unpopular groups.

Finally, Prof. Philip Hackney (The Surly Subgroup, a blog that deals with tax law) points to Principle Voices of Polygamy, a 2013 IRS decision that denied a tax exemption to a pro-polygamy group, partly on the grounds that,



[Y]ou provide conferences for attorneys and others in the legal community seeking to represent those performing polygamous acts. Your website, rallies, and publications try to change general opinion about polygamy. Similar to Bob Jones University, whose activities created an environment to perpetuate discrimination, see Bob Jones, 461 U.S. 574, your training courses as well as your website and rallies all seek to create an environment where people are free to contravene state law and federal policy. Not only do you seek to create a permissible environment, but you also suggest to people that they must perform illegal acts by stating, through your website, that polygamy is the only way to achieve “exaltation.”

You admit in your application and through your material the illegality of polygamy and you actively fight to alter the status of polygamy. You train individuals in proper techniques for advocacy and argumentation. These trainings are directed solely at the polygamous community. The trainings are intended for political advocacy as well as day-to-day advocacy of an illegal lifestyle. You hope to use the media to broadly disperse a positive view of an illegal activity. Furthermore, you provide specific training on how to lobby, which is also directed solely at the polygamous community. This training activity is supported by pro-polygamy rallies, visits to the state capital building, and printed material on your website espousing a singular pro-polygamy point of view.



But much of this analysis, which to my knowledge has not been approved by a court, is in large measure inconsistent with the court’s and the D.C. Circuit’s stress that tax exemptions can’t be denied on the basis of a group’s viewpoint. Trying to “change general opinion about polygamy” can’t be treated differently from trying to change general opinion about marijuana, or about illegal immigration — or for that matter for trying to reinforce general opinion about polygamy. Likewise, hoping “to use the media to broadly disperse a positive view of an illegal activity” can’t be treated differently from trying to use the media to disperse a negative view of an illegal activity, or for that matter from trying to use the media to disperse a positive view of illegal immigration, or of illegal homosexual conduct during an era (before 2003) when homosexuality was illegal in some places. A “pro-polygamy point of view” is just as protected against viewpoint discrimination as any other view.



It’s possible that the group could be properly denied 501(c)(3) tax-exempt status on the grounds that it predominantly supported lobbying to change the law (which is another argument the IRS gave). As I mentioned, the court has upheld such a broad subject matter restriction on 501(c)(3) status, precisely because that restriction was viewpoint-neutral. But to the extent that the IRS decision was based on the pro-polygamy group’s viewpoint, the decision violated the First Amendment, as cases such as Rosenberger and Z Street (cited above) make clear.



Thanks to Paul Caron (TaxProf Blog) for the pointer.





Eugene Volokh teaches free speech law, religious freedom law, church-state relations law, a First Amendment Amicus Brief Clinic, and tort law, at UCLA School of Law, where he has also often taught copyright law, criminal law, and a seminar on firearms regulation policy. Follow @volokhc



https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/12/29/no-the-irs-may-not-deny-tax-exemptions-on-the-grounds-that-a-group-is-a-supposed-hate-group/?utm_term=.8e432b7647a9

Dozens of ‘Hate Groups’ Have Charity Status, Chronicle Study Finds

NEWS AND ANALYSIS
The Chronicle of Philanthropy
By Eden Stiffman
DECEMBER 22, 2016

The federal government has granted tax-exempt status to more than 60 controversial nonprofits branded by critics as "hate groups," including anti-immigrant and anti-gay-rights organizations, white nationalists, and Holocaust deniers, according to a Chronicle of Philanthropy analysis.

The issue is a thorny one for the Internal Revenue Service, which must balance First Amendment rights against concerns that it is essentially granting government subsidies to groups holding views that millions of Americans may find abhorrent. Complicating matters, the IRS is already under fire from critics who say the agency has discriminated against conservative political organizations.

The Southern Poverty Law Center has compiled a list of nearly 900 so-called hate groups, most of them on the far right (although the roster also includes radical Islamists, black separatists, and other fringe groups) and many with deceptively innocuous-sounding names. The Chronicle analysis found that 55 of those organizations are registered as charities and eight are 501(c)(4) "social welfare" groups, which also enjoy tax exemptions.

Many groups on the list vehemently dispute the "hate" designation and say the Southern Poverty Law Center — known as SPLC and itself a tax-exempt organization — is a left-wing attack group. And most of the groups on the list are relatively small, with less than $500,000 in annual revenue.

Still, some experts say organizations are increasingly pushing the boundaries of how far they can go and still meet the standard for tax exemption.

"We want to be careful about what we're requiring the public to subsidize through tax exemption and at the same time we want not to inhibit speech too much," said Eric Gorovitz, a lawyer with Adler & Colvin, a firm specializing in nonprofit law. "That's just hard to do."
Education or Extremism?

The SPLC list includes several white-nationalist organizations that civil-rights groups say have been emboldened by the election of Donald Trump.

Two such nonprofits — the New Century Foundation, which produces the online publication American Renaissance, and the National Policy Institute — "see themselves as primarily dealing with research and education around race, immigration, and other issues affecting European-Americans," said Marilyn Mayo, a research fellow in the Anti-Defamation League's Center on Extremism.

National Policy Institute leader Richard Spencer, who gained notoriety when he hailed President-elect Trump's victory with a Nazi-style salute at a recent meeting of the group, said being included on the "hate list" has had no major repercussions for the institute and that its revenue has tripled in the last year. The group's 2012 Form 990 reports more than $125,000 in revenue but it hasn't filed a 990 since then.

The IRS grants tax-exempt status to organizations that exist for purposes that are most commonly educational, charitable, or religious. Essentially, a tax-exempt organization is considered educational if it produces materials that are factually supported and which allow people to make up their mind about a particular viewpoint. Distorting facts, providing only unsupported opinions, or using inflammatory or disparaging terms based on emotions rather than facts may influence the IRS determination.
Pushing Back

The Southern Poverty Law Center defines hate groups as those which "have beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics."

"We're not proposing that these groups be thrown in prison for expressing their views," said Mark Potok, a senior fellow at the SPLC. Nor does the organization advocate for these groups to have their nonprofit status revoked. But Mr. Potok does see the issue as problematic.

"In effect, the American taxpayer is subsidizing false propaganda defaming minority groups," he said. Claims by watch-list organizations to be educational institutions are "simply a facade," he added: "There's a difference between education and propaganda."

Several groups on the list that were contacted by The Chronicle said the SPLC has unfairly demonized them and questioned the organization's legitimacy as an arbiter of what constitutes hate.

Dan Stein, president of the Federation for American Immigration Reform, said the SPLC — which has labeled the federation an anti-immigrant hate group since 2007 — has done "nothing but demean, smear, and attack its opponents."

"They claim that they're trying to promote tolerance when they're completely intolerant of people with an alternative point of view," he said, adding that his organization plans to seek an IRS investigation of the SPLC's own tax-exempt status over alleged illegal political activity before the presidential election. Mr. Stein declined to detail the specifics of the complaint, which he said will be filed after Mr. Trump takes office.

In 2010, several conservative groups, including the Family Research Council and the American Family Association, took out full-page ads in Politico and the Washington Examiner, signed by 22 members of Congress and other conservative leaders, accusing the SPLC of engaging in "character assassination."
Potential for Abuse

"Hate group" designations are invariably going to be controversial, said Brian Levin, director of the Center for the Study of Hate and Extremism at California State University at San Bernardino and a former Southern Poverty Law Center employee. Though he believes the SPLC's list is "principled," Mr. Levin said it is incomplete — leaving out, for example, groups viewed as far left.

And there's potential for abuse both by the government and independent watchdog groups like the SPLC, he said. Mr. Levin's center also monitors hate groups and bigotry but does not produce a public list because, he said, doing so can stifle public debate.

"What happens when others start labeling other people who bring up legitimate parts of a public-policy debate that might not be popular?" he said.

Groups accused of espousing hate have been denied tax-exempt status in the past.

In 1983, the IRS revoked Bob Jones University's nonprofit status over its prohibition on interracial dating. That same year, the neo-Nazi group National Alliance was denied a tax exemption because its materials advocated for the violent removal of nonwhites and Jews from society.

But when the IRS denied charitable status to the radical feminist publication Big Mama Rag, claiming its stance was too "doctrinaire," the U.S. Court of Appeals for the D.C. Circuit ruled that the agency's definition of educational activities was too vague. So the IRS issued a new guideline that remains the standard today.

"It's fairly difficult for the IRS to deny or revoke tax-exempt status, unless there's a call to violence," said Marcus Owens, a tax lawyer who ran the IRS office that oversees nonprofit groups in the 1990s.

Some tax experts say that standard is not easy to apply, especially in the current political moment.

"We used to have the idea that somehow we could look at 'facts and circumstances' and determine whether something was 'educational' or 'political,' " said Frances Hill, a professor of constitutional, election, and tax law at the University of Miami. "The more I think about it, the more concerned I am that there just are no standards at all."

Though tax exemption is intended to be available to groups espousing a wide range of views, Ms. Hill worries that the concept of a nonprofit organization has become too malleable. "The idea of tax-exempt organizations devoted to hate speech is just corrosive of everything that the tax-exempt sector says it stands for."

Yet the IRS is in an impossible position, she said. Still shaken by the revelation that agency leaders had singled out conservative advocacy groups' applications for tax-exempt status for extra scrutiny, the IRS has little incentive to investigate organizations based on the content of their messages.

Mr. Gorovitz, the lawyer with Adler & Colvin, said it shouldn't be left to a taxing agency to decide who can say what. "If this is to change, Congress needs to write a clearer policy," he said.

He also worries that the IRS's lack of guidance for groups carries a risk.

"When people don't know where in the fog the electric fence sits, they stay out of the fog," he said. "What you really want to do is spotlight the fence, so they can walk right up to it."
The List's Impact

Mr. Potok expects the SPLC's 2017 watch list will be slightly smaller when it's released this spring. But experts like Mr. Owens say they wouldn't be surprised to see even more tax-exempt groups on future versions of the list, "particularly now with the tenor of current politics seemingly bringing out people who might have proclivities in the direction of extreme views."

Peter Brimelow, editor of the white nationalist website VDARE, which is supported by nonprofit VDARE Foundation, said he saw no impact in terms of fundraising or traffic to his site from his group's inclusion on the watch list, and he's not worried about damage to its reputation.

The rise of the internet and social media have made it easier for groups to define themselves, said Mr. Brimelow, who characterized the SPLC as "lying swine." Other nonprofits say the label has had a negligible — or even positive — impact on their operations.

ACT for America, which the SPLC calls the "largest grass-roots anti-Muslim group in America," is one of eight 501(c)(4) groups on the list. It coordinates much of its work with another nonprofit, the Center for Security Policy, a Washington think tank that raised almost $4.6 million in 2015 and is also on the SPLC's list.

Brigitte Gabriel, ACT for America's founder and CEO, said the SPLC label has led to an uptick in donations. "People who know what we do and educate about national security stepped up to support us because they were upset by the SPLC labeling," she said in an email to The Chronicle.

Although most of the nonprofits on the "hate" list are tiny, the roster includes several prominent conservative Christian organizations with Washington offices that raise tens of millions of dollars a year.

In 2012, an armed man named Floyd Lee Corkins walked into the Family Research Council's Washington headquarters with the intent to shoot and kill as many of its employees as possible. He was apprehended, but not before wounding the nonprofit's business manager. Mr. Corkins later told the FBI that he had seen the nonprofit listed as an antigay hate group on the SPLC's website.

In the wake of the incident, Tony Perkins, the council's president, said the SPLC's designation of his group gave Mr. Corkins "a license to shoot."

The Southern Poverty Law Center rejects that charge. "We are utterly opposed to political violence," Mr. Potok said. "What we had done is tell the truth."

The SPLC began adding anti-gay-rights groups to its list in 2010. It doesn't list groups for saying that homosexuality is a sin or opposing same-sex marriage, Mr. Potok said; organizations must go further and "engage in really vicious and regular defamation of LGBT people with total falsehoods," like claims that gay men are more likely to sexually abuse children.

Chris Gacek, senior fellow for regulatory affairs at the Family Research Council, insisted his organization's positions on homosexuality are "nuanced." He pointed to its briefing paper suggesting "that male homosexuality is a risk factor for child sexual abuse."

Aside from the 2012 shooting, Mr. Gacek said, it's tough to say what impact the SPLC label has had on his organization. "In terms of our posture and the communities we work with and our relationships with people in the incoming administration," he said, "we're probably doing better than we ever have."
Tax-Exempt Charities the Southern Poverty Law Center Lists as Hate Groups

Abiding Truth Ministries
Anaheim, Calif.
$100,363


American Border Patrol
Sierra Vista, Ariz.
$930,541


American College of Pediatricians

Gainesville, Fla.

$88,991


American Family Association
Tupelo, Miss.
$29,790,357


American Freedom Defense Initiative
New York, N.Y.
$729,031


American Freedom Law Center
Chandler, Ariz.
$1,022,916


American Immigration Control Foundation
Monterey, Va.
$511,557


American Vision
Powder Springs, Ga.
$303,936


Brother Nathanael Foundation
Priest River, Ind.
$233,97


C-Fam
Washington, D.C.
$1,657,233


Californians for Population Stabilization

Santa Barbara, Calif.

$1,181,416


Campaign for Children and Families, aka Save California

Sacramento, Calif.

$217,241


Center for Security Policy

Washington, D.C.

$4,562,641


Chalcedon Foundation

Vallecito, Calif.

$795,997


Christian Action Network

Forest, Va.

$1,055,190


Christian Anti-Defamation League

Vista, Calif.

$156,479


Christian Home Educators of Colorado, aka Generations With Vision

Parker, Colo.

$1,292,570


Citizens for Community Values

Cincinnati, Ohio

$460,366


Citizens for Community Values Foundation

Cincinnati, Ohio

$0


Conservative Citizens Foundation

Old Monroe, Mo.

$0


Coral Ridge Ministries Media, aka D. James Kennedy Ministries (formerly known as Truth in Action)

Fort Lauderdale, Fla.

$5,709,355


Council for Social and Economic Studies

Washington, D.C.

$40,114


David Horowitz Freedom Center

Sherman Oaks, Calif.

$7,532,891


Family Research Council

Washington, D.C.

$15,420,182


Family Research Institute

Colorado Springs, Colo.

$59,911


Federation for American Immigration Reform

Washington, D.C.

$8,594,856


Fitzgerald Griffin Foundation

Vienna, Va.

$41,090


Florida Family Association

Tampa, Fla.

$209,625


Friends of Intelligence Practitioners, aka Citizens for National Security

Boca Raton, Fla.

$114,053


Global Helping to Advance Women & Children, aka Family Watch International

Gilbert, Ariz.

$350,909


IHS Press

Norfolk, Va.

$0


Illinois Family Institute

Carol Stream, Ill.

$540,400


In the Spirit of Chartres Committee

Carrollton, Va.

$0


Israel United In Christ

Newburgh, N.Y.

n/a


Jihad Watch

Manchester, N.H.

$68,442


Legion for the Survival of Freedom, aka Institute for Historical Review

Santa Ana, Calif.

$39,021


Liberty Counsel

Orlando, Fla.

$5,572,566


Masjid Al Islam

Oakland, Calif.

$7,200


Nation of Islam Mosque 74

Indianapolis, Ind.

n/a


Nation of Islam of Atlanta Community Education Center

Atlanta, Ga.

n/a


National Policy Institute

Whitefish, Mont.

$125,325


New Century Foundation

Oakton, Va.

$243,861


Pacific Justice Institute

Sacramento, Calif.

$1,984,878


Pacific Justice Institute-Center For Public Service

Sacramento, Calif.

$0


Pass the Salt Ministries

Hebron, Ohio

$90,376


Probe Ministries International

Plano, Tex.

$651,324


Robert Sungenis/Catholic Apologetics International Publishing

State Line, Pa.

$139,890


Ruth Institute

San Marcos, Calif.

$262,113


Samanta Roy Institute of Science and Technology

Green Bay, Wis.

$970,378


Servant of Jesus & Mary

Constable, N.Y.

$4,873,280


Sharkhunters International

Hernando, Fla.,

$0


Tradition in Action

Montebello, Calif.

$231,586


Traditional Values Coalition Education and Legal Institute

Anaheim, Calif.

$67,728


United Families Foundation, aka United Families International

Gilbert, Ariz.

$0


VDARE Foundation

Litchfield, Conn.

$293,663


Showing 1 to 55 of 55 entries

n/a Not available
Note: Revenue figures are for the most recent year for which data are available, usually 2014 or 2015.
Source: Internal Revenue Service, Southern Poverty Law Center

Peter Olsen-Phillips contributed to this article. Send an email to Eden Stiffman.



https://www.philanthropy.com/article/Dozens-of-Hate-Groups-/238748

Should Courts Get to Define Religion?

The Massachusetts Supreme Court will decide whether a local shrine should be tax-exempt—a decision that could have broad implications for faith organizations in America. path depicting the Marian apparition at the National Shrine of Our Lady
MICHAEL O'LOUGHLIN
THE ATLANTIC
MAY 3, 2016

National Shrine of Our Lady of La Salette

Property-tax battles are rarely sexy. But a case now in front of the Massachusetts Supreme Judicial Court, about whether the 21 religious brothers and sisters who run the Shrine of Our Lady of LaSalette in Attleboro should have to pay taxes, could have huge repercussions. The Court’s decision will be an important part of the ongoing debate in America about who defines religious practice—believers or bureaucrats—and whether religion itself should be afforded a special place under the law.

The case centers on a colonial-era law in Massachusetts that exempts religious houses of worship and parsonages from property taxes if they are used for religious worship or instruction. The shrine has enjoyed this perk since its founding in 1953. But in recent years, the City of Attleboro, nestled between Providence and Boston, has faced a tightening budget. It began looking to see where it could collect more revenue. The shrine, the only major tourist attraction in town, was an obvious target for tax collectors.

The city valued the property at $12.8 million, all of which had previously been exempt. But in 2013, officials decided that $4.9 million of that value represented property not used for religious worship or instruction. They declared that a maintenance shed, coffee shop, conference rooms, and a religious bookstore—along with the forest preserve that covers more than half the campus—are used for secular purposes. The shrine, the city decided, had to pay up, and received a $92,000 tax bill.

Under pressure, the shrine paid, but then sought a tax abatement through the courts, arguing that all 199 acres were used for religious purposes. Faith leaders from across Massachusetts agreed and filed a brief in support of the shrine. “The notion that local assessors or any government actor is equipped or would presume to deem whether one use of a religious organization's property or another falls within the definition of ‘religious worship’ is antithetical to religious freedom,” said the brief, signed by leaders representing Jewish, Christian, and Muslim organizations. Catholic bishops in Massachusetts, including Boston’s Cardinal Sean O’Malley, also weighed in, arguing in a brief that the shrine’s grounds offer “communion with nature,” which “is a core religious activity with ancient roots in Christianity’s past.”

As the justices weigh whether or not different parts of the shrine’s property are taxable, visitors to the campus have said they use it for a variety of purposes, both sacred and profane. Kristine Ramierez visits for the open space. The 26-year-old Catholic heads to the shrine a few times each month to attend Mass and lead retreats geared toward Catholic families. During these gatherings, she said, it’s not uncommon to light a candle in one of the indoor chapels and then head outside to pray and meditate, perhaps taking a seat in one of the gardens or venturing out to the nearby pond, where the church gets its holy water.

“Normally, in our own lives, we go from building to building and there’s not a lot of open space, which I think is needed for clearing your mind,” she said. The grounds of the shrine are perfect for this, she continued, calling them “very peaceful and meditative.”

Mike Rodrigues has visited the shrine since his childhood, too. But the 37-year-old Fall River resident goes primarily for the 400,000 Christmas lights the La Salette missionaries string up each year, an event that typically attracts hundreds of thousands of people.

“It’s a tradition in my family,” Rodrigues said. “It’s peaceful, it puts things in perspective. The ambiance and the energy in the place is powerful.” He remembers going as a kid, watching his grandparents climb up the long flight of stairs on their knees to reach the statue of the Virgin Mary situated at the top of the hill, reciting prayers along the way.

Today, he said, that’s a less common sight. Instead, visitors will likely find Santa Claus, a couple thousand crèches displayed throughout the grounds, and hordes of children enjoying apple cider and hot chocolate.

Both Ramierez and Rodrigues say their visits are meaningful. But one might be best described as a pilgrim, and the other, a tourist. This is what city officials argued in a brief: The farmers markets, carnivals, yard sales, and clambakes held on the shrine’s grounds are largely commercial activities. They say the Massachusetts law granting property-tax exemption has to be read literally: The text mentions only houses of religious worship, parsonages, and pews and other furniture, so the woods and café don’t qualify.

They even cited Pope Francis, pointing to a 2015 statement he made about the Catholic priests and nuns in Europe who said they could not house refugees in nearly empty monasteries and convents because they were renting out empty rooms to tourists. “Well, if that is what you want to do, then pay taxes!” the pope said. “A religious school is tax-exempt because it is religious, but if it is functioning as a hotel, then it should pay taxes just like its neighbor. Otherwise it is not fair business.”

If the justices rule that shrines’ grounds are taxable, the results could be devastating for other religious organizations. Although it’s very difficult to know the worth of property owned by these groups in the U.S., some estimates put the value at more than $600 billion—no small amount when it comes to the potential tax windfall that could bolster shrinking state and local government budgets. That number doesn’t even include all the bookstores, daycares, coffee shops, and other facilities often affiliated with houses of worship. The real figure may be much greater: In a single Florida county, for example, the value of property exempted from taxation under religious exemptions totaled $1.2 billion, according to a 2007 study.

The Court’s decision could also empower other municipalities to take a closer look at tax-exempt properties in their own jurisdictions as possible cash cows. Other religious organizations in Massachusetts are monitoring the case, fearful that their own assets could be the next targets for taxation. And it’s not uncommon for state judges to look to other jurisdictions for guidance or for federal courts to consider trends in the states as they rule on similar cases.

A trend seems to be emerging. Authorities in Tennessee decided in 2013, for example, that a bookstore and gym on the campus of an evangelical megachurch were not exempt from property taxes under existing law. Officials in Ohio decided in 2012 that church dormitories for visitors are taxable. And a local government in Mississippi is concerned that owners of strip malls are donating portions of their properties to churches—which allegedly don’t actually function as worship spaces—simply to lower their taxes.

On its face, the conflict in Attleboro is about the special status afforded to religious organizations under the law, which is being challenged by those who effectively see tax breaks as government sponsorship of religion. But the deeper issue is about who gets to define religion. Since its founding, Massachusetts has recognized the value religion gives to wider society, which is why the state has given churches certain tax breaks. The meaning of religion has expanded and changed since colonial days, and interpretations of the law should take that into account. In a pluralistic, multicultural country like the United States, believers have to be able to decide for themselves what constitutes their faith; that’s the only way to implement the existing law fairly.

If religious groups are forced to pay property taxes, ministries will contract and charitable programs will shrink.

The Reverend Cyriac Mattathilanickal, who heads the shrine, said its operations will undoubtedly be affected if the court decides it must pay property taxes. “For us, feeding the poor is very much part of our worship and instruction,” he said, noting that the soup kitchen operates in a space the city declared taxable. “We say that we should feed the poor, that we should take care of the poor, the homeless, and every Monday we feed 130 to 150 people in our cafeteria,” he continued. “I cannot separate that activity from the worship and instruction that we do inside the church as part of our prayer.”

Even the city has praised its value to the community. Jeremy Denlea, a city councilor whose district includes the shrine, called it “a great neighbor.” He said he hopes the shrine’s charitable endeavors, and its light display, will continue regardless of the court’s ruling, which is expected sometime this summer. But it’s fair for the city to try to collect taxes on the property, he said. “I think it’s unfortunate, and kind of uncomfortable right now,” he said. “But this is the cost of doing business in modern-day society.”

The effect of the looming ruling on the shrine’s future won’t be known for some time. But one thing seems likely: If religious groups are forced to pay property taxes, ministries will contract and charitable programs will shrink. Mattathilanickal said the soup kitchen and the shrine’s other charity work would likely face cuts should the court rule in favor of the city. If the government fails to supplement those services in Attleboro and elsewhere, which seems likely, it’s the poor who will ultimately suffer most.

“Everything will be impacted,” Mattathilanickal said. “Because the taxes will never go down, they will only go up and up. The taxes, they will keep increasing.”

http://www.theatlantic.com/politics/archive/2016/05/how-do-the-courts-define-religion/480903/

US Tax Havens; A History of American Religious Diversity

94.1
April 12, 2016

Listen to interview

Jack Blum spent years as a staff attorney for the Senate Anti-Trust Subcommittee specializing in white-collar corporate crime and off-shore tax evasion. He’ll join us for a conversation on what the Panama Papers tell us about the global financial world and the difficulties in stopping questionable business practices.

Then, Peter Manseau, author of the book One Nation Under Gods: A New American History, about the influence of multiple religions on the history of the United States.

About the book:

At the heart of the nation’s spiritual history are audacious and often violent scenes. But the Puritans and the shining city on the hill give us just one way to understand the United States. Rather than recite American history from a Christian vantage point, Peter Manseau proves that what really happened is worth a close, fresh look.

Thomas Jefferson himself collected books on all religions and required that the brand new Library of Congress take his books, since Americans needed to consider the “twenty gods or no god” he famously noted were revered by his neighbors. Looking at the Americans who believed in these gods, Manseau fills in America’s story of itself, from the persecuted “witches” at Salem and who they really were, to the persecuted Buddhists in WWII California, from spirituality and cults in the ’60s to the recent presidential election where both candidates were for the first time non-traditional Christians.

One Nation, Under Gods shows how much more there is to the history we tell ourselves, right back to the country’s earliest days. Dazzling in its scope and sweep, it is an American history unlike any you’ve read.

https://kpfa.org/episode/letters-and-politics-april-12-2016/

Church tax exemption & choir founder charged with child sex offence

Peter Kelso
Royal Commission
April 4, 2016

 

Tax concessions granted to religious organisations see the Federal Government miss out on taxing $30 billion of their revenue each year, according to an article in The Age.

The Catholic Church accounts for more than half of this amount, with annual revenue in the vicinity of $16 billion. The rationale for a religious organisation tax exemption is that Churches use profits to provide charitable services, but the Royal Commission into Institutional Response to Child Sexual Abuse has told a different story. The Royal Commission has uncovered criminal activities, corruption and incompetence in the Church. Is it time for the churches to be held accountable for how they spend their money?

The Catholic Church has again angered child abuse survivors by refusing to make public more than 2000 secret files on 63 paedophile priests. The files are a collection of confessions and complaints compiled by the Church’s insurance company since the 1990s, and contain enough legal evidence to send bishops, police and insurance types to jail. While the files have been handed to the Royal Commission, the Church has resisted calls to release the documents to the public.

Choir founder charged with child sex offence

In other news, one of the founders of Tasmania’s Rosny Children’s Choir, Ian Filby, 78, has been charged with having regular sex with an under aged choir girl in the 1980s. Police questioned the alleged offender six years ago but did not pursue their investigation.

However, the victim complained to the Child Abuse Royal Commission during its hearings in Launceston last year. The Commissioners referred the complaint to the police and Filby was charged earlier this month. Two years ago the choir organist was jailed for abusing the same girl.

http://royalcommission.com.au/time-to-rethink-church-tax-exemption-choir-founder-charged-with-child-sex-offence/