Author’s note: I submitted this article about 24 hours before Houston Mayor Annise Parker instructed the city attorney to withdraw the subpoena discussed below. The general threat remains. The Left will attempt to control or break churches through taxes. My gaming of the Houston situation is now more theoretical than when I originally wrote this piece and I now see they are more afraid of testing the current regulatory scheme than I thought. The IRS gets their most effective silencing of speech out of the lack of clarity surrounding their regulations, and somebody on the other side knows it.
Last week I wrote an article discussing the possible long-term strategies underlying the subpoena for speeches from various church leaders in Houston. I think it is part of a larger strategy to control religious institutions though taxes. In response, I fielded questions in the comments, my inbox, and inquiries to my publisher that posed two main objections: the City of Houston has no authority to enforce the federal tax code, and the connection between the subpoenas and tax exemptions is too tenuous.
The first objection is rather easy to answer. I did not claim the City of Houston would enforce federal tax regulations. My worry was that once Mayor Parker had gathered the speeches and communications for the underlying suit about a petition against a Houston ordinance, then either the Internal Revenue Service would seek to use the documents for a tax-exemption inquiry or Parker might play the dutiful citizen and turn the information over to the IRS hoping to spurn a tax-exemption investigation. The IRS is under pressure to enforce its Johnson Amendment regulations against religious entities, including facing lawsuits from atheist organizations who view the tax exception for religion as governmental favoritism and, therefore, an unacceptable governmental establishment of religion. If Houston pastors comply with or are forced to comply with the subpoena, their lawyers would be prudent to prepare for a 501(c)(3) investigation.
The second objection was more common from lawyers, and illustrated the main reason I wrote the article. The objectors maintained that the connection between the subpoenas and a revocation of IRS tax-exemption status was too tenuous and had too many defensive blocks. I do not contend that the City of Houston et al. have a great argument. They don’t. But that doesn’t mean they won’t run it. While watching the Houston events, I’ve also been following a North Dakota story in which lawyers are using mandatory bar dues to lobby against a ballot measure. This is in direct conflict with Supreme Court rulings and possibly state law. Their main argument to date is to claim the measure is a social issue, not a political one. The point is that lawyers make weak arguments every day. And sometimes weak arguments win. See Commerce Clause jurisprudence since Wickard v. Filburn.
I worry that we are relying on “obviously they can’t do that” and not preparing for the arguments the opposition could make, specifically that religions are not entitled to tax exemptions. Progressives want to destroy, or at least control, religious influence. Right now, tax pressure is their only viable option for doing so. That it is hardly viable won’t stop them. They think they have strong arguments. They think that public opinion on religion is swinging to their favor. The tax man cometh. The weakness of their arguments does not absolve us of the need to prepare a defense.
Let’s Try Some War Games
So let us game the Houston situation. Option one: The City of Houston withdraws the subpoena. Option two: the court refuses to enforce the subpoena. Option three: the churches comply with subpoena and then the court combs the documents for instructions on petition signatures. Option four: the pastors refuse to comply with the subpoena.
I think most people expect option two, but I think that is wishful thinking. The City of Houston is alleging improper signatures on the petition against a city ordinance. That is, they allege violation of laws neutral toward religion. Courts make such exceptions on freedom of speech and religion all the time. See generally Eugene Volokh’s background posts on the Religious Freedom Restoration Act. One example:
RFRA begins with the findings that, “the framers of the Constitution, recognizing free exercise of religion as an unalienable right, secured its protection in the First Amendment to the Constitution,” and “laws ‘neutral’ toward religion may burden religious exercise as surely as laws intended to interfere with religious exercise.” To this point, this might sound like a justification for massive protection. Does your religion require you not to pay any taxes to what you see as a corrupt, un-Godly government? Well, tax laws may burden this religious exercise as surely as laws intended to discriminate against your religion, and, hey, your free exercise of religion is an “unalienable right.”
But of course our legal system has never accepted any such view of free exercise. Likewise if your religion requires you to make pilgrimages to a visitation of the Virgin Mary on my property, or to take my property and give it to the poor, or to kill me for blaspheming, or to do many other things that the legal system forbids with no regard for religious objections….
Indeed, the very next provision in the RFRA findings section, coupled with the body of the statute, confirms that religious exemption claims are always subject to override by “compelling government interest[s].”
It’s perfectly plausible that the court could decide that the City of Houston and the Mayor are seeking information relevant to laws of neutral applicability and allow the subpoenas to go forward. Think fraud. Did the pastors tell parishioners to sign for their underage children? Did they ask them to sign for the dead, just not alphabetically? (Lyndon Johnson’s legacy, again.) This is also why I think option one, withdrawal of the subpoena, is unlikely. With the narrowed subpoena, the contention that it is a basic discovery instrument is, frankly, their most solid argument. Plus, after the publicity from earlier this month, backing down would essentially admit that the opposition is too afraid to challenge religious speech. Given everything else going on in the culture wars, the opposition is feeling bold. Backing down strikes me as unlikely.
Options three and four are more likely and both can quickly get to the question of taxes. Option three, the churches comply, puts the speeches and communications of pastors in play. I think the IRS will face extreme pressure to look at them. Furthermore, what are the chances that the pastors did tell their parishioners, for instance, to sign for the dead? Reiterating that I agree that this is a weak argument, once Parker’s team has studied the documents, Parker may have nothing better against the petition signatures than that they were obtained by speech which violated the churches’ exempt status under the federal tax code. I think they have considered this argument anyway. Note Mayor Parker’s recent comment: “It is not about what someone may have preached. It is about whether in any forum they gave specific instructions how to fill out the petition because that is the crux of the legal case.”
She sees the crux of the case not as fraudulent instructions, but specific instructions. Under what law are specific instructions possibly prohibited? Tax exemption laws. Recall too, the original over-broad subpoena. Why did it ask for all communications? Perhaps because they needed all the communications to make a “substantial activities” argument. Why did they ask for communications about the mayor herself? Because the IRS’s political speech restrictions about political candidates are absolute. The IRS can revoke tax-exempt status for one minor violation. And what are the chances that in any speech or communication about the ordinance at issue the pastors may have expressed their opposition to the mayor or members of the City Council?
The foundations for a tax exemption attack are there. Weak or not, we need to prepare a defense—or go on offense.
If the pastors refuse to comply with the subpoena, option four, they will need to state why. That the government has no business subpoenaing religious speech likely won’t suffice. (See above about option two.) They will have to explain why the subpoena is improper and part of that argument should be that the pastors worry the City of Houston doesn’t really seek knowledge of fraudulently obtained signatures but of political speech in general, political speech which is only prohibited by regulations promulgated pursuant to an unconstitutional law, the 1954 Johnson Amendment.
How Religious Liberty Lovers Should Respond to the Subpoenas
For decades, religious freedom advocacy groups have been trying to mount a challenge to the Johnson Amendment, but the IRS keeps backing down, wisely as the institution probably knows the law is weak and that they get the maximum possible silencing of political speech from the lack of clarity and uneven enforcement of the current 501(c)(3) exemption scheme. Clarity will not come without a test case.
Mayor Parker’s overreach here is a strategic gift. Take it. When would we ever get a better shot at a clear statement that religion is beyond the taxing power of government? This question about governmental power over political speech by religious institutions has arisen after decades of non- to selective and even contradictory enforcement of IRS regulations and on the heels of a Congressional investigation into extreme malfeasance by the IRS, during which time the IRS made a closed-door settlement with an advocacy group hostile to religion about how to revoke tax-exempt status for religious entities.
The pastors’ fear is justified. The public’s fear is well-founded. The IRS has been using its power to persecute.
The pastors could comply with the subpoena and then wait to find out what accusations of wrongdoing the City of Houston and Mayor Parker choose to adjudicate. Or the pastors could pursue the question before the court. They could name their fear: religious persecution. The could go back to the confidence argument Justice Marshall set forth in McCullough and overlay our contemporary facts on that argument and maybe, finally, remove the threat to religion posed by the federal tax-exemption schemes which are hostile to the First Amendment.