Government

IRS Grants Tax Exempt Status To Satanic Temple

Is it appropriate for a government agency to decide which belief system is worthy of tax exemption?

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(Photo by Josh Reynolds for The Washington Post via Getty Images)

Last week, there were reports that the IRS granted 501(c)(3) tax-exemption status to an organization called The Satanic Temple. This means that the temple’s donation income is not subject to federal income taxes. Also, any donations made to the Satanic Temple could be tax-deductible to the donor. And yes, working for the Satanic Temple for 10 years qualifies you for PSLF status, which means your federal student loans can be forgiven tax-free.

So how did they do it? And what was the IRS thinking when it granted tax-exempt status to an organization associated with Satan?

Section 501(c)(3) grants tax exemption status to a variety of organizations, including those that operate exclusively for religious purposes. In IRS Publication 557, for an organization to have a religious purpose, two requirements must be met:

  • The particular religious beliefs of the organization are truly and sincerely held; and
  • The practices and rituals associated with the organization’s religious belief or creed are not illegal or contrary to clearly defined public policy.

How can the IRS verify whether someone’s religious faith is truly and sincerely held? Will the IRS throw you into a lion’s den or command you to sacrifice your firstborn on top of a mountain? Or will the IRS seize your assets as God did to Job? In reality, the IRS won’t do much at all. Section 7.25.3.6.4 (Validity of Religious Belief) of the Internal Revenue Manual states that the IRS cannot pass judgment on the merits of the applicant’s asserted religious belief. If the IRS tried, it would likely violate the First Amendment’s guarantee of religious freedom.

Are the practices and rituals of The Satanic Temple’s religious belief and creed illegal or contrary to clearly defined public policy? According to the Satanic Temple’s website, their mission is to encourage benevolence and empathy among all people, reject tyrannical authority, advocate practical common sense and justice, and be directed by the human conscience to undertake noble pursuits guided by the individual will. Their FAQ section states that the temple does not worship Satan nor believes in his existence. The temple has promoted the separation of church and state. And finally, the temple has been in existence since 2013 and since then, there have been no reports of the temple being associated with any criminal or immoral activities.

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This is a far cry from the Biblical portrayal of Satan who not only ruined the Garden of Eden for the rest of us but is also destined to battle God in the final battle according to the book of Revelations. I’m sure most would agree that an organization formed for the purpose of preparing for a global apocalypse with four horsemen led by Satan in his dragon form is illegal and contrary to clearly defined public policy and is undeserving of tax-exempt status.

As a tax-exempt entity, the Satanic Temple must also abide by rules applicable to all 501(c)(3) organizations. This includes the prohibitions on using temple funds being to benefit private individuals, influencing legislation, and participating in political campaigns. If the temple is recognized as a church, then it is exempt from filing an annual information return.

Under current IRS rules, it seems fairly easy to obtain tax-exempt status for religious purposes so long as the organization does not do anything illegal, such as enabling the final battle between good and evil. Whether that is a good thing is debatable both on religious and secular grounds. But in the final analysis, is it appropriate for a government agency to decide which belief system is worthy of tax exemption?

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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