General Discussion
In reply to the discussion: Does anyone else think it's time to tax the churches? [View all]Sgent
(5,858 posts)There are at least 17 different types of non-profits recognized by the IRS, with all of them having different tax implications. Labor Unions, country clubs, VEBA plans, outside pension plans, etc. are all 501(c) organizations -- just not necessarily 501(c)3.
One reason a lot of non-profits are not taxed on income (see country club) is that they generally don't earn anything over time, thus wouldn't owe anything, but it would create a lot of paperwork. However, donations and money given to them does not generate a deduction on the giver's return.
IMHO, it entangles the government too deeply into churches to tax them directly, and provides too big of a cudgel for a politically motivated government. The only change I would make is that donations to churches cannot be deducted from the donors taxes. The churches could still form a charitable arm for true charitable work, but it would be subject to the same rules as every other charity.