The Humanist Society of Greater Phoenix has decided to take aim at part of the federal tax code that gives members of the clergy special tax exemptions that the group feels should also apply to it.
The tax code provision in question allows churches to give their pastors housing allowances or use of a church-owned home tax-free. Critics have said it has allowed for mega-churches to exclude millions of dollars from their pastors’ taxable income, since there is no limit in the tax code.
Now, the Humanist Society of Greater Phoenix is looking to use the same exemption in the wake of a recent court ruling that shot down a different organization’s push to challenge the tax code.
“We perform a lot of the same functions that churches do,” Executive Director Luke Douglas told Arizona Mirror. “This case is about starting a conversation.”
Douglas said the Humanist Society of Greater Phoenix plans to claim the exemption.
The Humanist Society is a nonprofit that was created in California in 1939. Celebrants, like Douglas, are members of the organization that have been recognized by the group as leaders and are generally recognized as clergy across the country. However, the group has hit roadblocks when trying to get the same tax exemptions that churches receive and courts have ruled are constitutional.
Humanist Society of Greater Phoenix sees it as a “test” of the code to see if it is applied equally and fairly. The group in the past has successfully fought for property tax exemptions and has had certain exemptions revoked for having “non-theistic” beliefs. For example, in 1957 it was recognized as a religious organization, but a different ruling in 1994 complicated this when the court did not recognize secular humanism as a religion.
“I don’t think most people declare publicly when they are taking a different interpretation of the revenue code,” Phoenix tax attorney Giselle Alexander told the Arizona Mirror about the approach the group is taking. “Usually when people are testing the boundaries of a code section…..they’re quiet about it.”
This latest effort is picking up where a recent lawsuit by the Freedom From Religion Foundation left off.
That group recently lost in appellate court after initially winning in trial court on a lawsuit challenging the tax code’s exemption for pastoral living allowances as a violation of the Establishment Clause.
The Establishment Clause, along with the First Amendment and the Free Exercise Clause, make up the United States’ freedom of religion laws.
FFRF’s argument was that the tax provision allowing churches to exempt the properties their clergy live on is not equally applied to all religious groups.
“Our end goal is equality, and it’s less about whether religion is good or bad,” Douglas said, adding that he feels groups who do similar work as churches in the non-profit sector should be entitled to some of the same benefits as traditional religious organizations.
Alexander said many of the tax exemptions afforded to religious institutions are already applied to non-profits, with the parsonage exemption being one of the few exceptions.
“There’s not a huge difference between your average religious organization and the normal non-profit,” Alexander said.
Douglas said he thinks a cap on the amount allowed to be exempted from taxation or a broadening of the code to allow groups like his to have the same benefits as churches would be ideal. However, he also sees inaction by the IRS as a possible win, as it would mean groups similar to the one he runs would be free to do the same.
Douglas said he was hesitant to be the person challenging the tax exemption, as it puts him at the center of what could become a contentious battle with the IRS.
Challenges to the parsonage exemption are not very common, Alexander said. Most challenges come in the form of a church stating that the allowance given is not enough for a church in places with high costs of living, such as San Francisco or Flagstaff.
The Humanists in Phoenix are not the only group that has recently decided to cause waves among theists and non-theists alike in regards to United States tax codes.
The IRS recently gave the Satanic Temple nonprofit status, causing an uproar among some religious groups and confusion among others as the group often takes political stances and is admittedly “non-theistic.”
Religious institutions have revenue of about $378 billion annually, which is “more than the global annual revenues of tech giants Apple and Microsoft combined,” according to a research paper by Georgetown University.