Losing Our Religion: Reevaluating the 501(c)(3) Exemption of Religious Organizations that Discriminate

51 Pages Posted: 27 Mar 2008 Last revised: 19 Feb 2013

See all articles by Nicholas A. Mirkay

Nicholas A. Mirkay

William S. Richardson School of Law, University of Hawaii

Date Written: August 25, 2009


Religious organizations occupy an enviable legal stature in American society, receiving over 200 exemptions and other regulatory breaks in federal legislation over the last 18 years alone. Religious organizations enjoy numerous federal as well as state and local tax exemptions representing hundreds of billions of dollars in foregone revenue. The propriety of these lucrative tax exemptions must be questioned when religious organizations engage in discrimination against members of society. As illustrated in real-life occurrences contained in pages 3 and 4 of the article, ostensibly widespread discrimination by such organizations exists not only with respect to employment, but more importantly in providing services or engaging in activities for which the organization was originally granted tax-exempt status (e.g., education). The primary bases for such discrimination are currently sexual orientation and marital status.

In a prior article published in the WISCONSIN LAW REVIEW, I proposed a solution to the problem of discrimination by charitable organizations (a term commonly interpreted to include religious organizations) - enact a broad and well-defined nondiscrimination condition on tax exemption under Section 501(c)(3) of the Internal Revenue Code. Inherent in that proposal is the notion that discrimination by charitable organizations is intrinsically incompatible with such organizations' purpose and mission. Although my prior article briefly addressed the constitutional and other difficulties inherent in applying a nondiscrimination requirement to religious organizations, it acknowledged the necessity of additional and more thorough discussion on the issue - thus, the focus of this Article. Accordingly, this Article examines the propriety and constitutionality of subjecting religious organizations to a nondiscrimination requirement and crafting a more narrow church exception to that requirement. It proposes statutory and regulatory amendments to prevent certain church-affiliated organizations from avoiding the nondiscrimination requirement.

Keywords: taxation, religious organizations, tax exempt, discrimination, constitutional law

JEL Classification: K34

Suggested Citation

Mirkay, Nicholas A., Losing Our Religion: Reevaluating the 501(c)(3) Exemption of Religious Organizations that Discriminate (August 25, 2009). Widener Law School Legal Studies Research Paper No. 08-35; William & Mary Bill of Rights, Vol. 17, p. 715. Available at SSRN: https://ssrn.com/abstract=1112776 or http://dx.doi.org/10.2139/ssrn.1112776

Nicholas A. Mirkay (Contact Author)

William S. Richardson School of Law, University of Hawaii ( email )

2515 Dole Street
Honolulu, HI 96822-2350
United States
8089569435 (Phone)

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