Hernandez V. Commissioner of Internal Revenue, 490 U.S. 680 (1989)
Encyclopedia of American Civil Liberties, Vol. 2, pp. 761-762, 2006
2 Pages Posted: 20 Apr 2007
This piece is an encyclopedia entry on Hernandez v. Commissioner of Internal Revenue. Hernandez is best known as a leading United States Supreme Court decision on taxation and nonprofit organizations. It is also important, however, for the questions it raises about both the law's treatment of unconventional religious movements and its broader conceptualization of religion itself.
In Hernandez, the Supreme Court upheld the Internal Revenue Service's rejection of charitable deductions claimed by members of the Church of Scientology for payments they made for practices of the church known as "auditing" and "training." The Scientologists contented that the fees, although fixed in amount and required to obtain those services, were similar to other sorts of religious payments whose deductibility the IRS had long allowed, including pew rents, tithes, and mass stipends.
The Court's statutory analysis held that, to qualify as contributions or gifts, payments cannot be made as part of a quid pro quo in expectation of a good or service. Moreover, the Court rejected the Scientologist's statutory and constitutional arguments that this analysis is inappropriate to payments made for purely religious benefits.
As noted, Hernandez acutely exposed some of the complexities in the law's understanding of religion. Nonprofits law has always classed churches as "charities." In some respects, though, they more closely resemble "mutual benefit" organizations such as social clubs, and payments by believers to their churches - whether part of a formal quid pro quo or not - often look more like club dues than gifts. Nevertheless, the law's assignment of charitable status to all churches rests less on an empirical claim than on an intricate set of considerations, including both a respect for religious autonomy and a healthy reluctance to ascribe undue legal significance to the considerable differences among churches in their practices and modes of organization.
Keywords: taxation, nonprofits, law of charities, charitable deductions, religion, Free Exercise of Religion, Establishment Clause, Church of Scientology, Scientologists, statutory construction, statutory treatment of religion
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