Thursday, October 21, 2010

Pastor Brad’s big surprise

Andy Birkey of the Minnesota Independent broke the story of Pastor Brad Brandon’s announcement of several political candidate endorsements from the pulpit of the Berean Baptist Church in Hastings, Minnesota. In his announcement, he challenged the IRS to take away the church’s tax exemption. [correction] Pastor Brad may get his wish; the group Americans United for the Separation of Church and State filed suit complaint with the IRS Monday to accomplish just that.

Pastor Brad was undoubtedly thinking, “What does it matter, anyway; the church is hardly a money-making enterprise.” But the big sting for the church is probably not the income tax, but rather the property taxes it will have to pay on its church building.

Here’s the relevant provision of the Minnesota Statutes:

Institutions of public charity. Institutions of purely public charity that are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code are exempt if they meet the requirements of this subdivision. [the statute goes on to list the requirements]

Sadly for Pastor Brad and his flock, the IRS exemption is a sine qua non to preserving a property tax exemption for the church building. If it loses the 501(c)(3), status, it also loses its tax exempt status for property taxes.

8 comments:

DiscordianStooge said...

Why did a lawsuit have to be brought for the IRS to look into this? If my neighbor is claiming extra kids on her taxes, can't I just make a phone call? And isn't this similar?

blogspotdog said...

That is, of course, what Americans United did, filed a complaint, not a suit. I wrote late at night (for me, anyway) and wrote it wrong. I'll fix the post shortly.

blogspotdog said...

Note the correction. If you go to the linked complaint, you will see that it relies on Andy Birkey's reporting of the endorsements by Brad Brandon.

Randy said...

Another financial hit for the flock would be the loss of the ability to deduct their contributions from their income taxes.  I don't know if this would make the contributions dry up, but it could cause some givers to think twice.

blogspotdog said...

That may, in fact, be the biggest problem.

Sherry said...

A large part of a minister's salary is also tax-free to the extent it is treated as a "parsonage" or housing allowance.  So, Pastor Brad could take a nice tax hit too,  assuming they let him stick around and continue his job after starting a fight with the IRS.

DiscordianStooge said...

OK. I've heard other people say they "sued" as well, so I wanted to make sure.

blogspotdog said...

It just gets better for Pastor Brad and the Baptists, doesn't it?