AHA News |  

Grassley Report Highlights Need to Remove Church Exemption from IRS Reporting

Washington, DC, January 07, 2011

The American Humanist Association (AHA) responded today to Sen. Chuck Grassley’s (R-Iowa) report on the financial practices of mega-churches, pressing for greater accountability for churches.

"Grassley's investigation exposed numerous high expenditures for purchases that were clearly not in the public interest,” said Roy Speckhardt, executive director of the American Humanist Association. “When institutions of any kind aren't held accountable there will be abuses. And when there's no oversight of church finances we're going to see lavish spending by some preachers.”  

The six mega-churches that were investigated preach versions of the “prosperity gospel,” an evangelist teaching which adheres to the belief that God blesses his followers financially. The purchase of mansions, lakeside properties, private aircrafts, and related operating expenses were all accounted for under the churches' tax exempt status, and thus indirectly supported by taxpayers.

While secular nonprofits and churches are both 501(c3) organizations under IRS tax code, churches have a purpose designation enabling them to receive special treatment: they don't have to file annual IRS 990 financial disclosure forms, they get advance notice when the IRS plans an audit of their finances, they don't have to report the identities of their major donors, and ministers receive the benefit of the Parsonage Allowance--allowing them to write off the value of their housing.

“The time for special rights for churches is over," said Speckhardt. "Let's change the rules and end the church exemption from having to report their income and expenses to the IRS. If it's good enough for the rest of America, why not the churches? How much longer will taxpayer money be spent in the pursuit of ministers ‘personal prosperity’?”

According to a Senate Finance Committee memo, “After the letters went out to the six churches, constituents from across the country wrote requesting congressional investigations of other churches and religious organizations.”

“Religious organizations have been given a free pass for far too long,” continued Speckhardt. “We must lift the veil that's obscuring corruption and hold churches accountable to the public.”

The American Humanist Association (www.americanhumanist.org ) advocates for the rights and viewpoints of humanists. Founded in 1941 and headquartered in Washington, D.C., its work is extended through more than 100 local chapters and affiliates across America.

Humanism is a progressive philosophy of life that, without theism, affirms our responsibility to lead ethical lives of value to self and humanity.