Stabby-

Is it proper for someone to write off contributions to a religion(tithes) come tax day?

Somehow it sounds like we're paying (at least us americans) for church construction in a round about way.

Stabby------------

liquid

Not sure how it is in the US, but in the UK ALL charitable donations are now tax-deductable, so it removes that issue. I don't think you could argue that we are paying with taxes, we just aren't getting as much in the first place, which is different really.

MassAtheist

Yes. Let me qualify, I assume you are referring to donations to a church (not a religion). As long as the church is a non-profit (in the eyes of the IRS), then the donation is deductible.

Toto

Donations to Internet Infidels are also tax deductible. <a href="http://www.infidels.org/infidels/support.shtml" target="_blank">Vote with your dollars.</a>

See this old thread (now closed)

<a href="http://iidb.org/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=2&t=000275" target="_blank">Is tax-free status an establishment of religion? </a>

ohwilleke

Just to follow up on what the law "should be", I personally think that:

(1) There shouldn't be a charitable income tax deduction, which adds bureacracy and government supervision to the non-profit sector and don't have a huge impact on the amount of giving actually done (non-itemizers, for example, who don't get the deduction, still make significant gifts as a percentage of their income). Money spent on charitable donations should be like any other non-deductible personal expense.

(2) Pastor's housing allowances should be eliminated from the tax code.

(3) Non-profits should not be exempt from property taxes. This benefits mostly churches and private schools. And, again, it entantles non-profits in the process of trying to justify the non-profit status to governmental officials. Property tax exemptions are also a great burden on the for profit sector in areas which a very high percentage of non-profit land ownership. Non-profits wealthy enough to own real estate can usually afford to pay property taxes that pay for local government services which help those same non-profits and their staffs.

(4) Non-profits should not be exempt from sales taxes. This isn't necessary and creates more bureaucracy to claim the exemption and show you are a non-profit, rather than keeping government uninvolved in non-profits.

(5) Donations to non-profits should be exempt from gift and estate taxes. These taxes really do impact charitable giving, and making gifts and inheritances tax exempt gets your charitable choices off any tax forms (since you don't have to report a gift to a charity for tax purposes, as you would a gift to a person).

(6) Non-profits should be taxed on investment income, like interest and dividends, just like any other corporation. This is the rule that applies to political organizations now.

(7) Non-profits should be, as they are now, taxed on income from businesses unrelated to their charitable purposes.

(8) Non-profits should not be restricted any more than for profits entities, from engaging in poliitical activities.

(9) Non-profits should not be taxes on income from activities related to their purpose. This (and the gift and estate tax exemption) should be their only tax benefit. The also keeps non-profits away from government scrutney, and simply defining what constitutes a profit in the context of a church requires all sorts of analysis better left undone.

(10) Non-profits should continue to be subject to payroll taxes like any other employer.

Taken as a whole, this would make non-profit tax law easier for amateurs to manage. Property taxes and sales taxes are easy, non-profit employers would have the same burdens as now, no tax documentations would have to be provided to anyone, and no one would have to agnoize over taking political stances. The only added burden would be a simple tax return on investment income (probably with a de minimus $600 a year exemption or some such) each year.

[ March 12, 2002: Message edited by: ohwilleke ]</p>

liquid

While I agree with most of that, the recent move to make charitable contributions in the UK tax-deductible has provided a very significant boost.

1: Because a better proportion of your money goes to the charity, slightly but significantly more is given.

2. More importantly, when I say tax-deductible, the tax doesn't come off your bill. What actually happens is that the tax you have paid for each pound gets taken out of the govt treasury and given to the charity too.

MassAtheist

I really like that idea. It doesn't cost the government anything and the charity gets more money. How is it administered? That is, how does the gov't determine how much money goes to each charity? It seems like there would be significant overhead costs.

ImGod

I would hardly call what I have donated to churches over the years, charitable donations. My old church would take in the money, skim off overhead expenses, and give 20 percent to charitable causes (that number includes missionary work). This church was definitely using government tax incentives to help increase revenue for construction projects, salaries, supplies, and recruitment. They mentioned the tax implications during the tithing sermon, and would print nice year-end donation statements for your tax records. I like the idea of pulling church overhead contributions out of the tax deduction and only allow the amount directly given to charitable organizations to be tax deductible.

My old minister would ask us to pray on how much to give to the church. Unfortunately for him, I started to think about it instead. I gave more money directly to the charitable agencies (still tax deductible) and spent less money overall because I eliminated the middleman and his overhead. My contributions increased, just not to the man who asked me to pray.

Toto

In <a href="http://www.atheists.org/flash.line/church31.htm" target="_blank">an unusal case</a>, the Ninth Circuit has raised the question of the constitutionality of the tax exempt housing allowance for ministers on its own, and has requested a Friend of the Court brief from University of Southern California law professor Erwin Chemerinsky on the question.

In what seems like a blatant tax dodge,

It was pointed out that the IRS would not challenge its own regulation, and ministers would never want to challenge it. But the Ninth Circuit felt that "If ... under the constitution, Rev. Warren is not entitled to any tax deduction at all because such a deduction would violate the First Amendment, then it is not possible to decide the case on non-constitutional grounds and reach the correct result.""

ohwilleke

Great news! I'd always wondered how this lasted so long.