Atheist Group Sues IRS for Exempting Churches From Requirement to File Annual Informational Form

MADISON, Wisc. — One of the nation’s most conspicuous professing atheist groups has filed a lawsuit against the Internal Revenue Service (IRS) after its charity Nonbelief Relief lost its tax-exempt status for not filing form 990 for three consecutive years. The organization contends that the government wrongly shows preferential treatment to churches in automatically exempting them from the requirement, but punishing other non-profits by enforcing the mandate to file the annual informational form.

“The information return exemption given to churches and other religious organizations constitutes discrimination on the basis of religion in violation of the Establishment Clause,” reads the lawsuit filed by the Wisconsin-based Freedom From Religion Foundation (FFRF). “[T]he revocation of plaintiff’s tax-exempt status violated the Establishment Clause, as well as the Equal Protection rights of the plaintiff.”

FFRF founded its non-profit organization Nonbelief Relief in 2015 to provide financial donations to various charitable groups and “individuals targeted for nonbelief, secular activism, or blasphemy.” It has donated to efforts such as Doctors Without Borders, the Secular Underground Railroad, World Food Program USA, Population Services International, and the Women’s Medical Fund—the latter of which seeks to provide funding to mothers who can’t afford an abortion.

In August, Nonbelief Relief’s tax-exempt status was revoked for failure to file form 990 for three consecutive years. The IRS website outlines, “Most tax-exempt organizations other than churches and certain church-related organizations are required to file an annual information return or notice with the IRS. Organizations that do not file for three consecutive years automatically lose their tax-exempt status.”

Those who lose their status may apply to have it reinstated.

FFRF finds it discriminatory that churches and their auxiliary endeavors are not subject to the filing requirement while organizations such as Nonbelief Relief are held to the mandate. Independent religious non-profit organizations must file, but not churches and their associated efforts.

“The preferential treatment of churches and affiliated religious organizations results in obligations imposed on secular non-profits, including the plaintiff, that are not imposed on churches,” the legal complaint reads. “[T]he benefits of tax-exempt status also are denied to the plaintiff as a penalty, including the loss of otherwise tax-deductible donations from donors.”

FFRF states in its lawsuit that while the 990 filing requirement is enforced, the IRS has not enforced its ban on endorsing political candidates. It claims that a number of churches “are quite deliberate and open in their defiance of the politicking prohibition,” yet suffer no consequences.

The IRS website states that “the law prohibits political campaign activity by charities and churches by defining a 501(c)(3) organization as one ‘which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.’”

In its lawsuit, FFRF points to an incident last month when televangelist Paula White, and Terri Copeland Pearsons, the daughter of controversial prosperity preacher Kenneth Copeland, allegedly told those at Eagle Mountain International Church in Texas to “vote red … without any fear that the IRS is going to take away your right to donate to this church and deduct it from your taxes.”

“Thus, while the Internal Revenue Service enforces the requirements to maintain § 501(c)(3) status against non-religious charitable organizations, like the plaintiff, the multiple requirements are not enforced against churches and church-affiliated organizations,” FFRF states.

“The differential and discriminatory policies and practices of the Internal Revenue Service in regard to enforcement of the  requirements to maintain § 501(c)(3) status constitute preference for religion that is prohibited by the Establishment Clause,” it asserts.

FFRF is seeking a declaration that the church exemption from the 990 filing requirement violates the Establishment Clause and that Nonbelief Relief’s tax-exempt status was revoked in violation of that clause. It is also asking that the court order the IRS to discontinue offering the filing exemption to churches and their auxiliary efforts.

“Tax-exempt groups, whether religious or nonreligious, must be treated equally by our government,” remarked Annie Laurie Gaylor, Nonbelief Relief administrator and FFRF co-president, in a statement. “The IRS has revoked Nonbelief Relief’s tax exemption for failure to file information returns, even though virtually all churches in America fail to file such returns while not endangering their tax exemption. That’s invidious discrimination and favoritism toward religion.”

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