Proposed Amendment May Restore Associated Churches' Tax-Exempt Status
by Allie Martin
December 15, 2005
(AgapePress) - - A U.S. senator from Arkansas has proposed a measure that would restore tax-exemption eligibility for a handful of churches across the United States. The amendment is designed to address a 2001 Internal Revenue Service ruling that disqualified "associations of churches" from claiming tax-exempt status if they allow individual members to vote during organizational meetings.The Internal Revenue Service ruling primarily affected members of the Cooperative Baptist Fellowship, an organization that comprises 1,800 churches across America. The amendment to remedy their predicament was introduced by Senator Mark Pryor, who says the IRS probably never intended to strip churches' tax-exempt status, but simply made a mistake in interpreting the law.
"It's a quirky ruling," the lawmaker from Arkansas observes, "but, basically, what the Internal Revenue Service said is that, because the members can actually go and vote at a Cooperative Baptist Fellowship meeting, therefore they are not entitled to the tax-exempt status like most churches are." He says it is "a convoluted decision" on the government agency's part and one with which he disagrees.
"What happens oftentimes with the Internal Revenue Service is they'll face a situation, they'll make a decision; and the next one comes along, and they make a decision," Pryor notes. "Then the next one comes along, they make a decision," he adds, "and before you know it you have this little body of case law within the tax courts -- and if you're not careful, sometimes you'll get some oddball decisions."
Pryor's amendment has been adopted by the U.S. Senate as part of the Taxpayer Relief Act of 2005. Now, for the provision to become the law of the land, it must pass the U.S. House of Representatives and be signed by President George W. Bush.
Allie Martin, a regular contributor to AgapePress, is a reporter for American Family Radio News, which can be heard online.
