Virtual church not churchly enough for the IRS

August 19, 2010
Virtual church not churchly enough for the IRS

The Foundation of Human Understanding calls itself a church. The Internal Revenue Service begs to differ. The taxman asks: How can the Oregon-based foundation be a church when it doesn't really convene anywhere?

This week, the U.S. Court of Appeals for the Federal Circuit sided with the IRS in rejecting the Foundation of Human Understanding's bid for the tax-exempt status granted recognized churches. It's a decision worth considering in this age of virtual communities.

Incorporated in 1963, the Foundation describes itself as "based upon Judeo-Christian beliefs and the doctrine and teachings of its founder, Roy Masters." Masters, BTW, is a former conservative radio talk show host from Los Angeles.

The Foundation used to own certain buildings; more recently, the court noted, "the Foundation...continued to disseminate its messages through broadcast and print media, and it began to use the Internet for the same purpose."

The appellate court noted that a church, for taxing purposes, means more than simply providing religious teachings. Regular assembly of the congregation is also part of the church package. The fact that the Foundation convened 21 seminars nationwide was not sufficient, judges determined, nor was the Internet ministry. Reasoned the court:

"The fact that all the listeners simultaneously received the Foundation’s message over the radio or the Internet does not mean that those members associated with each other and worshiped communally."

The court added"

"A call-in show, like other forms of broadcast ministry, does not provide individual congregants with the opportunity to interact and associate with each other in worship, and it therefore does not provide a basis for concluding that the Foundation’s religious activities satisfied the associational test."

Posted by Mike Doyle at 01:54 PM | Permalink
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