Giving the Ministerial Exception a Bad Name

Over at PrawfsBlawg, our friend Paul Horwitz notes an interesting piece in the New York Times yesterday on doings at the Trinity Broadcast Network, an extremely successful Christian cable channel. Well, “doings” is perhaps too polite. TBN, which advocates the so-called “Prosperity Gospel,” has received many millions of dollars over the years in donations from the faithful — $93 million in 2010 alone. An insider now claims that much of the money has gone to fuel the lavish lifestyle of TBN executives, particularly the network’s founders, the husband-and-wife team of Paul and Janice Crouch. I won’t go into the details, except to say that the portrait is one of high-spending, low-rent excess, and that the allegations come from one of the Crouch’s own granddaughters, who other family members say was the real sponger.

IRS regulations prohibit “excess compensation” for executives of non-profit organizations. According to the Times, though, TBN has been able to avoid scrutiny by relying on the ministerial exception. TBN has allegedly ordained “dozens of staff members . . . including chauffeurs, sound engineers, and others,” as ministers, thus allowing TBN to give them rent-free luxury “parsonages” and to avoid paying Social Security taxes on their salaries. TBN’s lawyer defended the network’s actions, arguing that the hundreds of ordained employees, including performers at a TBN-affiliated religious theme park, had experienced a true religious vocation.

Who knows how these allegations will sort out? One issue that seems sure to arise, though, is fraud. Some of the Court’s church autonomy cases suggest that fraud is a limitation on the ministerial exception, though the cases don’t really develop the idea. If the IRS were to go after TBN, it could argue that the ordinations for company workers without any theological or pastoral training were phony. Questioning such ordinations would obviously raise free exercise concerns, though, and at least one legal expert the Times quotes thinks it won’t happen: “absent clear fraud, the government is not going to touch that.”

Render on Religious Practices, Sex Discrimination and Toleration

Meredith Render (U. of Alabama School of Law) has posted Religious Practice and Sex Discrimination: An Uneasy Case for Toleration. The abstract follows.

This essay considers two questions: (1) whether there are moral or instrument reasons to tolerate religious practices that contravene our fundamental public values; and (2) in instances in which there is no moral or instrumental reason to tolerate a practice that contravenes public values, whether it is appropriate to condition the availability of tax exempt status on religious institutions’ fidelity to public values.

The essay offers a response and supplement to the insights contained in Caroline Mala Corbin’s interesting essay, “Expanding the Bob Jones Compromise” in which Corbin thoughtfully argues that we should withdraw tax exempt status from religious institutions that discriminate on the basis of sex. Corbin observes that tax exempt status is already conditioned on nondiscrimination with respect to race, and she offers the insight that there is no principled reason to treat sex and race discrimination differently in the this context. While this essay accepts the latter insight, I argue that there may be instrumental reasons why we would be concerned about the government determining which religious practices contravene our nondiscrimination norms and which do not. I further raise concerns about the mechanism Corbin selects (conditional tax exempt status) in light of Hosanna-Tabor, the Supreme Court’s latest articulation of the degree of protection offered by the Religious Clauses to religious practices that implicate the selection of ministers.

More on Taxing the Church in Italy

Following up on an item we covered in December, a law clarifying the Catholic Church’s responsibility for property taxes is making its way through the Italian Parliament. Although media reports describe the law as controversial, it actually breaks little new ground, Time Magazine reports. Since 2005, the Church has had to pay tax on property it uses for commercial purposes; the Church does not object to that. Property used for non-commercial (religious and non-profit) purposes remains exempt; no one, except perhaps the Radical Party, seems to object to that. The only controversy is what to do with mixed-use property: property that is used for religious and commercial purposes, like a convent that contains a chapel as well as a few rooms for tourists. Under the new law, only those parts of mixed-use property that are used for commercial purposes would be subject to tax. Religious entities would be required to account for which parts of their property are in fact used for commercial purposes. The law’s opponents argue that this arrangement is susceptible to abuse; in a country where tax enforcement is so lax, they argue, no one is likely to check the accounting.

Italy’s Catholic Church flexible on property tax

That’s the headline of an AP story over the weekend, here. Italian law has traditionally granted a tax exemption on real property owned by non-profits, including the Catholic Church. The exemption extends not only to property used for religious reasons, but more broadly to any property that is not “exclusively commercial” in nature — for example, guest houses for pilgrims and medical clinics. Critics argue that the exemption allows the Church (and other non-profits, presumably) to conduct commercial activities  without paying tax. Given Italy’s fiscal crisis, the new government is signaling that it will reconsider the breadth of the exemption, and the Church is signaling that it may go along:

One of Monti’s Cabinet ministers, Andrea Riccardi, is one of the most prominent lay Catholics in Italy, the founder of the Sant’Egidio Community with close ties to the Vatican.

He said this week that the church should pay the property tax if commercial activity is being carried out on the property. “I think that all the all the religious and cultural activities of the church are a richness for the country and the tax shouldn’t be paid,” he told RAI state television.

But if individual cases are discovered where commercial activity is being carried out, “necessary measures should be taken.”


Church Funding in Europe and America

Sociologist Grace Davie has famously described churches in Europe as “public utilities,” state-supported institutions that people assume will be there for them when the occasion demands — weddings and funerals, for example. She contrasts this with the American idea of churches as “firms,” that is, private associations that members support through voluntary contributions. From La Stampa this week, a fascinating piece addressing attempts by the Catholic Church in Europe to move to the American model, so far without success. State budgetary shortfalls and church scandals have made public funding much less certain, and the Church is encouraging European Catholics to see themselves as “stewards” who must support their local parishes financially. The long tradition of state funding makes Europeans reluctant to accept this new responsibility, however.

Christmas Tree Tax on the Way

I cannot quite decide whether this report is in jest or not, but it appears to be real.  But if it is real, I am having a difficult time understanding the aims of the tax.  Why is it necessary to improve and expand the Christmas tree market?  What secular government purpose is at stake, other than improving the lot of people who sell Christmas trees?  And if that’s all that is at stake, why did the government choose Christmas tree sellers as opposed to a different group; say, clothes retailers or winter sled manufacturers?  At least on one currently popular understanding of the Establishment Clause, why is collecting revenue for the explicit purpose of promoting the image and marketability of a “sectarian symbol” like this not problematic?  — MOD

UPDATE: Thanks to my alert colleague, Mark, I see that the US Department of Agriculture has decided to delay imposition of the tax.  The Administration spokesman does not want to call it a tax, but prefers to call it a “fee” which the “industry group [is] deciding to impose . . . on itself.”  If that is the case, then why is the US Department of Agriculture involved in imposing the fee?  On the other hand, it appears from at least some accounts that none of the money is going to the federal government itself.

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