I corrected the thread title. I'll allow this thread with the understanding that it focus on this specific topic
and not branch out into other issues.
I looked on Wikipedia for a specific reference. Here it is, from this article
26 USC 501(a). The exemption from Federal income tax is longstanding. This exemption formed part of the Revenue Act of 1894. The 1894 Act was the first broadly applicable U.S. tax on corporate income, but was soon declared unconstitutional. Since ratification of the Sixteenth Amendment to the United States Constitution in 1913, the exemption for charitable, religious, and educational organizations has been included in all subsequent Federal income tax law. See Belknap, Chauncey, "The Federal Income Tax Exemption of Charitable Organizations: Its History and Underlying Policy," 1954, reprinted (very large file) as pages 2025-2043 of the Research Papers of the Commission on Private Philanthropy and Public Needs, Volume IV, 1977.
Churches are exempt from corporate income tax because they fall under the broad umbrella of charitable organizations. Nonprofit organizations are not allowed to be politically active. Again, here's the code reference, excerpted from here
(3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
The current argument against the tax exemption on churches is based on the condition established in that paragraph, which is that they not engage in political activities. 26 USC § 501 (C)(3) is seen by some as infringing on the First Amendment rights of churches, and they are currently planning various activities in defiance of the law in order to bring this issue to public attention.
My personal take on the matter is that any church that engages in this form of civil disobedience should not be subject to police action, such as arrest, but should instead have its tax exempt status revoked by the IRS.
edited 4th Oct '12 1:52:41 PM by Fighteer