July 26, 2007 | Read Time: 2 minutes
The Church Alliance, which represents a group of executives and leaders from more than 35 national church organizations, has asked the Internal Revenue Service to allow religious groups to keep confidential the federal tax forms they file to show how much income they receive from activities not related to their charitable missions.
The organization, in a letter to the tax agency, says that requiring church organizations to make public the tax form, known as Form 990-T, could set a dangerous precedent.
Congress required all organizations that have charity status under Section 501(c)3 of the Internal Revenue Code, including religious groups, to make public the Form 990-T as part of the Pension Protection Act of 2006. The form requires nonprofit groups to disclose income from the sale of goods, rent, capital gains, advertising, and other business and investments, and to calculate how much in taxes they owe on such income. The 990-T also requires nonprofit groups to list the compensation of its top officers, directors, and trustees.
Church groups have historically been shielded from requirements to make public the details of their financial operations. Congressional aides who designed the provision say it was intended to make it easier for the public to monitor the finances of all nonprofit groups, including religious organizations.
But David Starr, a lawyer representing the Church Alliance, says requiring church organizations to file financial information through the Form 990-T would open the door for other previously private information to be made public.
“We believe that the constitutional principle of the separation of church and state means that the IRS should not mandate the publication of information on how church assets are invested or on any other tax-related issues involving individual churches or church organizations,” Mr. Starr wrote in a letter to the IRS. “If the IRS takes the position that it can force the release to the public of information that involves internal church investments, earnings, and distributions, then it could just as easily force the public disclosure of donors, members, and other related information.”
