Religion Superior, Says Government
Indianapolis Baptist Temple
Zimmerman - Posted: 08.16.00
The Circuit Court
of Appeals in Chicago has ruled against the
Indianapolis Baptist Temple (IBT)
and has affirmed the lower court's decision to allow the IRS to seize the IBT's
Today (Tuesday, August 15)
when I spoke with a clerk at the appellate court I was informed that the
decision was reached yesterday (Monday, August 14).
The court's opinion
follows this article. I then contacted the US District Court, Southern District
of Indiana and spoke with Judge Sarah Barker's clerk, Barbara Williamson.
She acknowledged that the Court of Appeals had upheld Judge Barker's previous
ruling, but could not say how that decision would affect the current
that is before the court. She said that they'd have to wait until
read the appellate court's opinion to see what effect it would have on
the pending Motions to Vacate and for Appointment of Receivers filed by the
Department of Justice.
I followed up
by contacting the Department of Justice's public relations person, Obern
Rainey,in Washington, DC. She stated that she was unaware that the court had
reached a decision and would have to look into the matter before commenting. She
did leave a message for me, but I was not able to reach her for further
I have attempted to contact Rev. Greg Dixon and the IBT's attorney,
Dr.Albert Cunningham, but as of this writing I have not heard back from
As always I will follow this
story as it develops and pass on any
information I have.
of Appeals Opinion:
the United States Court of Appeals
For the Seventh Circuit
United States of
Appeal from the United States District Court for the Southern District of
Indiana, Indianapolis Division. No. IP98-0498 C-B/S--Sarah Evans Barker, Chief
Argued May 11, 2000--Decided August 14, 2000. Before Coffey,
Evans, and Williams, Circuit Judges.
Williams, Circuit Judge. The members of
Temple (IBT) believe it to be a sin for their church to
pay taxes. Accordingly, since at least 1987, IBT has paid none of the federal
employment taxes for which it is responsible. After attempts to secure payment
of the taxes due through 1993 failed, the government filed suit against IBT to
recover the amount owed. Unpersuaded by IBT's various defenses, the district
court granted the government summary judgment. IBT now appeals on the ground
that the religion clauses of the First Amendment protect it from liability. We
founded in 1950 and operated as a not- for-profit
corporation until 1983,
when it began operating as a unincorporated
religious society. In 1986, IBT
renounced its status as an
unincorporated religious society, opting instead
to define itself as a "New Testament Church," based on its belief that the
exclusive sovereignty of Jesus Christ over the church required it to
disassociate itself from secular government authority. Around the same time, and
for the same reason, IBT also stopped filing federal employment tax returns and
paying the federal employment taxes for which it was responsible.
There are three federal employment taxes -
the social security
tax, the medicare tax, and the normal income tax.
Employers must pay half of the applicable social security and medicare taxes and
must withhold from employees' wages the other half of the applicable social
security and medicare taxes, as well as all of the applicable normal income tax.
26 USC sec. 3102(a), 3111(a), (b), 3402. Employers are liable for both the taxes
imposed directly on them and the taxes they are required to withhold from
employees. 26 USC sec. 3102(b), 3111(a), (b), 3403. Since sometime before 1987,
IBT has paid none of these taxes.
Eventually, the Internal Revenue Service
(IRS) contacted IBT
about its failure to file employment tax returns, but IBT
indication that it would file returns. As a result, in early 1994,
the IRS prepared quarterly returns for IBT beginning in 1987 and continuing
through 1993. The IRS then sent the forms to IBT so that IBT could check the
accuracy of the amounts on the returns, but IBT submitted no corrections. After
the time for submitting corrections had passed, the IRS calculated an assessment
of tax, interest, and additions totaling $3,498,355.62 and sent a notice and
demand for payment to IBT.
the assessment went unpaid, the government filed suit
against IBT seeking to
reduce the assessment to a judgment and to initiate foreclosure proceedings
against two parcels of real estate owned by IBT. In defense of its failure to
pay, IBT argued that the tax assessments at issue were not properly made against
it and that the religion clauses of the First Amendment protect it from
liability. On cross-motions for summary judgment, the district court rejected
both of IBT's arguments and awarded the government the relief it sought. IBT now
appeals, but only on the ground that the First Amendment's religion clauses
prevent the government from taxing it.
IBT challenges the
district court's decision on the grounds that
both the Free Exercise and
Establishment Clauses of the First Amendment, as well as general principles of
religious liberty embodied in the First Amendment, protect it from having to pay
taxes. As with all appeals from decisions granting summary judgment, we review
the district court's decision de novo, construing the evidence and the
inferences drawn from it in the light most favorable to the non-moving party.
Curran v. Kwon, 153 F.3d 481, 485 (7th Cir. 1998).
A. Free Exercise
IBT contends that the
federal employment tax laws, as applied to
it, violate the Free Exercise
Clause of the First Amendment by requiring the church to act in a manner
inconsistent with its beliefs. Specifically, IBT alleges that complying with the
federal employment tax laws would require it to recognize the sovereignty of the
federal government over the church, something that would be inconsistent with
its belief in the exclusive sovereignty of Jesus Christ over the church. In
IBT's view, the Free Exercise Clause grants it a right to act in accordance with
its beliefs, notwithstanding contrary federal law.
The Free Exercise Clause absolutely
protects the freedom to
believe and profess whatever religious doctrine one
desires. Employment Div., Dep't of Human Resources v. Smith, 494 U.S. 872,
876-77 (1990); Sherbert v. Verner, 374 U.S. 398, 402 (1963). It also provides
considerable, though not absolute, protection for the ability to practice
(through the performance or non-performance of certain actions) one's religion.
Smith, 494 U.S. at 877-78; Church of the Lukumi Babalu Aye, Inc. v. City of
Hialeah, 508 U.S. 520, 546-47 (1993). Significantly, however, neutral laws of
general application that burden religious practices do not run afoul of the Free
Exercise Clause. Smith, 494 U.S. at 878-85.
IBT does not (and, in any event, could
not) contest the
government's characterization of the federal employment tax
laws as neutral laws of general application. Those laws are not restricted to
IBT or even religion-related employers generally, and there is no indication
that they were enacted for the purpose of burdening religious practices.
Contrast Church of the Lukumi Babalu Aye, 508 U.S. at 531-45 (concluding that
laws forbidding a particular religion's animal sacrifices were neither neutral
nor generally applicable). Accordingly, IBT's Free Exercise challenge to the
federal employment tax laws must be rejected.
IBT, however, argues from the premise that
this conclusion does
not follow directly from the fact that the federal
employment tax laws are neutral laws of general application. Rather, IBT
proceeds as though the Religious Freedom Restoration Act (RFRA), 42 USC sec.
2000bb-1 et seq., somehow overturned the Supreme Court's decision in Smith-
-that neutral laws of general application cannot be attacked on Free Exercise
grounds--and reinstated the pre-Smith standards for evaluating Free Exercise
challenges. RFRA did not (and could not) do this. See City of Boerne v. Flores,
521 U.S. 507, 516-20, 535-36 (1997). RFRA simply established an independent
statutory regime essentially prohibiting the enforcement of laws that cannot
satisfy the pre-Smith standards./1
Even if IBT's misguided attempts to invoke
RFRA as a
constitutional standard are construed generously as an effort to
seek relief on statutory grounds, IBT's challenge to the federal employment tax
laws must still be rejected. Under RFRA, laws that substantially burden the free
exercise of religion cannot be enforced unless the burden furthers a compelling
government interest and is the least restrictive means of furthering that
interest. 42 USC sec. 2000bb- 1. In several pre-Smith Free Exercise challenges
to the application of federal tax laws, the Supreme Court and various courts of
appeals concluded both that maintaining a sound and efficient tax system is a
compelling government interest and that the difficulties inherent in
administering a tax system riddled with judicial exceptions for religious
employers make a uniformly applicable tax system the least restrictive means of
furthering that interest. See Hernandez v.
Commissioner, 490 U.S. 680, 698-
700 (1989) (challenge to federal income tax); United States v. Lee, 455 U.S.
252, 258-60 (1982) (challenge to social security tax); South Ridge Baptist
Church v. Industrial Comm'n, 911 F.2d 1203, 1206-10 (6th Cir. 1990) (challenge
to premiums required by workers' compensation program); Bethel Baptist Church v.
United States, 822 F.2d 1334, 1338-39 (3d Cir. 1987) (challenge to social
The cases that have been decided under RFRA
reach the same conclusion. See Browne v. United States, 176 F.3d 25, 26 (2d Cir.
1999) (challenge to federal income tax); Adams v. Commissioner, 170 F.3d 173,
175-80 (3d Cir. 1999) (same); Droz v. Commissioner, 48 F.3d 1120, 1122- 25 (9th
Cir. 1995) (challenge to social security tax). We find this authority persuasive
and see no reason to reach a different conclusion.
IBT, however, claims that the cases we
have cited can be
distinguished on factual grounds as each involved a
legal entity, whereas IBT is simply a "New Testament
Church." But, none of these cases, expressly or implicitly, rely on the fact
that the entities involved were state-recognized, nor does such a distinction
have any logical connection to the relevant legal standards. Accordingly, we
conclude that RFRA provides no basis for sustaining IBT's challenge to the
federal employment tax laws.
B. Establishment Clause
IBT contends that applying the federal
employment tax laws to it
violates the Establishment Clause of the First
Amendment by deeply
involving the government in the internal affairs of the
church. In IBT's
view, the payment and withholding obligations imposed by
these laws, as well as the enforcement proceedings that have resulted from
refusal to comply with these laws, require a constitutionally
impermissible amount of government involvement in church affairs.
The Establishment Clause prohibits
government sponsorship of,
financial support for, and active involvement in
Jimmy Swaggart Ministries v. Board of Equalization, 493
U.S. 378, 393 (1990); Walz v. Tax Comm'n, 397 U.S. 664, 668 (1970). However,
total separation of church and state is not required. Walz, 397 U.S. at 668-72.
If a statute has a secular purpose and it has a primary effect of neither
advancing nor inhibiting religion, it will be upheld. Mitchell v. Helms, 120 S.
Ct. 2530, 2540 (2000) (plurality opinion); Agostini v. Felton 521 U.S. 203,
IBT concedes that
the federal employment tax laws have a secular
purpose and only contends that
the laws have a primary effect of
inhibiting religion to the extent that they
foster excessive government
entanglement with religion. Cf. Agostini, 521
U.S. at 233 (listing excessive entanglement as one of three primary factors to
be considered in evaluating the effect of a law for Establishment Clause
purposes). In support of its excessive entanglement argument, IBT relies
exclusively on Walz v. Tax Commission, which upheld a property tax exemption for
houses of worship against an Establishment Clause challenge, reasoning in part
that removing the exemption would likely create greater government
(through property valuations, tax liens, tax foreclosures, etc.)
than leaving it in place would. 397 U.S. at 674. IBT claims that Walz thus
implies that taxing religious organizations (and all that goes with taxing such
organizations) fosters unconstitutionally excessive government
We cannot accept
IBT's reading of Walz. While taxing religious
organizations involves greater
government entanglement than not taxing them does, this greater entanglement is
not necessarily unconstitutionally excessive. In fact, the Supreme Court has
held that the sorts of generally applicable administrative and record keeping
requirements imposed by tax laws may be imposed on religious organizations
without violating the Establishment Clause. See Jimmy Swaggart Ministries, 493
U.S. at 394-97 (state sales and use tax); Hernandez, 490 U.S. at 695-98 (federal
income tax); see also South Ridge Baptist Church, 911 F.2d at 1210 (workers'
compensation program); Bethel Baptist Church, 822 F.2d at 1340-41
security tax). The normal incidents of collecting federal
taxes simply do not involve the intrusive government participation
supervision of, or inquiry into religious affairs that is necessary
find excessive entanglement. See Jimmy Swaggart Ministries, 493 U.S. at
394-96; Hernandez, 490 U.S. at 696-98. Even the somewhat more intrusive tax
foreclosure ordered in this case is a discrete event involving no inquiry into
religious matters and, as such, raises no excessive entanglement concerns.
Accordingly, there is no merit to IBT's Establishment Clause challenge to the
federal employment tax laws.
C. Other Arguments
Finally, IBT makes a pair of arguments
that rely on what it
contends are the general principles behind the religion
clauses of the First Amendment. First, IBT argues that applying general
regulatory laws to it would abridge the religious liberty guaranteed by the
religion clauses. As noted above, however, there is no basis under either the
Free Exercise Clause or the Establishment Clause for the argument that neutral,
generally applicable, minimally intrusive tax laws (like the ones at issue here)
cannot be applied to religious organizations. IBT asserts that Church of the
Holy Trinity v. United States, 143 U.S. 457 (1892), and Corporation of the
Presiding Bishop of the Church of Jesus Christ of Latter-day Saints v. Amos, 483
U.S. 327 (1987), are to the contrary, but it is mistaken. In Holy Trinity, the
Court declined to interpret an immigration statute to prohibit the immigration
of a Catholic priest, in part on the ground that it believed it unlikely that
Congress would have intended such a prohibition in light of the nation's strong
religious tradition. 143 U.S. at 465-72.
The case had
nothing to do with the constitutionality of general
regulatory laws, and
there is no question in this case regarding the intended scope of the federal
employment tax laws. In Amos, the Court upheld against an Establishment Clause
challenge an exception for religious organizations to Title VII's prohibition on
religious discrimination in employment. 483 U.S. at 334-39. Just as with the
property tax exemption in Walz, however, the fact that the Establishment Clause
allows exceptions for religious entities does not mean that such exceptions are
required. Put simply, applying neutral, generally applicable, minimally
intrusive tax laws to religious entities does not unconstitutionally abridge the
religious liberty guaranteed by the First Amendment.
Second, IBT takes issue with the district
of it as an unincorporated religious society under
Indiana law. IBT
contends that it is a "New Testament Church," not an
religious society, and that by characterizing it as such an
district court "established" a state church and imposed on IBT a
form of worship contrary to its beliefs. The district court did neither of these
things. It simply described the legal (not religious) nature of an
existing church. In any event, it does not matter what sort of entity IBT is.
Whatever it is, it must comply with the federal employment tax laws. Thus, IBT's
objection to the district court's characterization of it is both without merit
and beside the point.
IBT's challenges to the
application of the federal employment
tax laws to it are without merit.
Accordingly, we Affirm the judgment of the district court.
/1 We are
aware that the constitutionality of RFRA as applied to the
is not without doubt. Contrast City of Boerne, 521
U.S. at 536-37 (Stevens,
J., concurring) (suggesting that RFRA is
unconstitutional under the
Establishment Clause), with Christians v.
Crystal Evangelical Free Church (In
re Young), 141 F.3d 854 (8th Cir.) (upholding RFRA against an Establishment
Clause challenge), cert. denied, 525 U.S. 811 (1998). However, as the government
does not contest the law's constitutionality here, we will assume the law is
constitutional. See Adams v. Commissioner, 170 F.3d 173, 175 (3d Cir.
* It is to be noted that even the Mark of the
Beast spoken of in Revelation 13: 15 - 17 may be considered "a neutral law
of general application" in that it proposes only to be a taxing of the
interchange of the privilege of buying and selling. Hence, the Mark of the Beast
will be found to be Constitutionally sound tax.
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