Skip to comments.How Exactly Will the HHS Mandate Kill Religious Freedom?
Posted on 06/19/2013 2:15:25 PM PDT by NYer
If youre a religious non-profit and you dont file a 990 with the IRS, youre off the hook. The US government says you are allowed to follow your beliefs and refuse to pay for your female employees birth control devices and medications, sterilizations, or morning after pills.
If you do file a 990 you have to pay for them, even if youre a pregnancy care center or a monastery — although the US government will kindly allow you to pretend that you dont.
And if youre a non-religious non-profit, or a youre for-profit company? You pay whether you like it or not.
Thats the current status with the HHS mandate.
What is form 990?
Form 990 is used by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033, IRS instructions say helpfully.
Guide Star, a charity rating organization, has a better explanation. Intended to prevent charities, trusts, and other organizations from doing things they are not entitled to do, the 12-page 990 form requires filers to list their boards of directors, their donors, their missions, their activities, their employees, their income and expenses, and other information that allows the IRS to see if the organization is really doing what it says it does. Because tax forms are public records, potential donors can look at 990 forms to see how charities spend their money, and so 990s are used to rate charities by how much of their income is spent on overhead vs. the charitys mission. (Though required by the IRS, donor lists for some non-profits are not available to the public.)
Who doesnt have to file 990s? Churches, certain church-related organizations, and certain government-related organizations. Thats it.
The certain church-related organizations are those that are considered integrated auxiliaries of a church (or, as the current administration likes to say, house of worship) — a tax status for only a small fraction of all non-profits affiliated with religions.
To explain what type of church-related organizations qualify, the IRS has compiled a 32-page booklet that lays out rules such as an IRC section 501(c)(3) organizations activities must be directed exclusively toward charitable, educational, religious, or other exempt purposes and organizations may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. The organization must qualify as a class of organizations that are related to a church or convention or association of churches, but are not such organizations themselves.
That last is key: Its what determines whether your soup kitchen qualifies or not. According to the IRS, an integrated auxiliary organization must qualify as a charitable organization, must be affiliated with a church, and must receive its funding primarily from the church (not — remember this one –from government or public grants, or from selling good or services to the public).
A Model that Doesnt Fit Catholics
One guide to church organization tax status explains it this way: historically, most churches operated by forming a congregation, then by having their members do activities in groups (mens societies, ladies societies, mission societies, etc.), most of which were made up of and funded by members and met on the church property. Therefore, this Protestant guide says, this is the basis for 990 exemption.
However, this history is not true of the Catholic Church. While parishes have always hummed with groups like the ones described above, the Catholic Church has also always had very large Church-affiliated groups with only a cursory relationship to a parish (monasteries and convents, universities, hospitals, etc.).
This is where the IRS designation of church affiliation gets dicey. According to the IRS, one requirement for an organization to be considered an integrated auxiliary organization if it is operated, supervised, or controlled by a church or group of church-like entities, or if relevant facts and circumstances show that it is so affiliated.
These relevant facts and circumstances include: having a charter or constitution that affirms that the organization shares common religious doctrines, principles, disciplines, or practices with a church; having at least one representative on the board that can be appointed or removed by a church; having a churchs name in the organizations name; reporting financially to a church; being designated a ministry by a church; and having to give its assets to a church if it disbands.
Sounds simple enough — but theres a catch, and its that requirement that the organization be funded primarily by the affiliated church/churches. Lets take a look at a charitable organization that the IRS says does not qualify.
The IRS example is a fictional retirement home affiliated with a church that receives an annual donation from that church to help run it, but the donation is less than half of the homes income. The home accepts anyone from its surrounding community; advertises to the general public; and maintains its name on area lists of retirement homes. The IRS says that despite being named for the church (ie: Pine Ridge Methodist Retirement Community) and despite receiving money from the church or consortium of churches, the home would not be considered an integrated auxiliary organization — even if it were governed entirely by the churchs principles and teachings.
Why? Because of a requirement for whats called internal support. According o the IRS, an integrated auxiliary organization is internally supported when it does not sell any services or products to the public, except on an incidental basis. The IRSs example of an example that meets such guidelines is a weekly newspaper that goes to church members but is available by subscription to anyone. The newspaper can take in nearly all of its advertising revenue from non-members as long as its outside subscription revenue remains incidental, and thus its product (the paper) primarily goes to its own members.
The IRS gives another example of an organization that does not qualify: A hospital. Like the fictional retirement home, the fictional hospital in question is named for a church and fulfills other requirements for being an integrated auxiliary organization, but not the requirement for internal support because it serves anyone and it receives more than half its income from public contributions, Medicare and Medicaid, insurance and patient payments, and grants.
Quick recap: To qualify for exemption from filing form 990, an organization must not receive a sizable a majority of its income from non-members and/or must not serve non-members.
What the Tax Status Means
So for governmental purposes, an integrated auxiliary organization is defined narrowly and is assumed to be one that grows out of a Protestant-style church or group of churches that either serves its own members (such as a group that helps its member widows and orphans) or serves the public but is financed by its own members (such as a church food pantry) or exists to spread its faith (like a mission society).
Anything beyond that, and you have to file a 990 like all non-church-related non-profits. And while the difference in tax status might seem slight (after all, theyre all non-profits) what matters is not the distinction, but how the distinction is used.
If its used to ensure that organizations like the fictional retirement home and hospital mentioned above do not misspend funds, and so that donors and potential donors can be sure that their donations are being allocated well, and to ensure that no board members or shareholders are skimming off the top, there is no problem.
But if its used to differentiate between which religious charities and non-profits are religious enough have their freedom of religion acknowledge by the US government, theres a problem.
The original HHS mandate exempted only churches, their ministers, and employees who worked directly for them in some capacity having to do with teaching or inculcating the religion (a church secretary but not a church janitor, for example). Revised rules announced this spring clarified that church-related auxiliary organizations (the kind that dont have to file 990s) are also exempt.
And thats it. All other church-related non-profits, which means most of them, can apply to have their insurance companies provide and pay for the coverage instead. Insisting that this unprecedented (and probably illegal) requirement would be revenue neutral, HHS officials also insisted that the affected non-profits pretend (wink wink, nod nod) they would not simply be paying for them in a government-mandated shell game.
One does not have to be a stickler for details to see that the covered items and the overhead costs (paperwork, administration, and so on) to pay for them have to come from somewhere, and that somewhere is insurance premiums.
Bye Bye, First Amendment
This will all come to a head on August 1, when the HHS mandate takes effect for religious charities, and those who dont defy mandate will get to play pretend.
But thats more than private companies get. Own a business? You cant say no.
In all these regulations, the key concept seems to be commerce. If you engage in commerce, your right to practice your religion freedom becomes slight to non-existent.
And as the US government has redefined engaging in commerce to mean not buying or selling, as well as buying or selling, thats pretty much everyone.
Bye bye, First Amendment. It was great while it lasted.
What a dream come true for the marxists in the white house. Force Catholics to choose between their beliefs and their jobs.
Waiting for them to tell Muslims that circumcisions won’t be covered under Obamacare. THEN the sparks are really gonna fly!
I hope ObamaCare will destroy jobs rather than destroying souls. No one should bow to Obama or to him evil minions - HHS is so far out of line that there is no common ground to even communicate on the issue.
Considering this FReeper was prepared to enter the Seminary out of high school, I’d have no problem with this. At some point, I’m going to have to account for my soul. I’d rather be unemployed and poor than dead and burning in Hell.
They were entitled to use weapons against the King's militia in self-defense, understanding that a 'well regulated, that is, controlled, militia' subject to the rule of law, and the Edict of Nantes, and the codicils surrounding that Edict, would be the only way they could guarantee the security of their 'state within a state', that is a 'free state'.
You hear the echoes of that in the Second Amendment don't you. That's 'cause some fellow writing those amendments had a Grandpa or great Grandpappy who was a Huguenot who worked on the drafting of the Edict of Nante 2 centuries earlier!
This particular rule was considered quite galling to the Catholics, but when Henry IV's great grandson Louis XIV came to the throne in the 1600s, the first part of the Edicts that brought peace between Catholics and Protestants that he chose to attack was this idea that you could shoot a militiaman who sought to infringe on your religious prerogatives.
Catholics don't have that same philosophical history, but they might start studying up on what the Huguenots were about and what they faced. This Obamugabe and his running dog lackeys are like Louis XIV and his royal dragoons. They respect only power and if you don't use power, they'll run you over and turn you into their slave, or you'll have to flee your homes for foreign nations!