5 Ways Churches Get Preferential Treatment and Benefit from Legal Loopholes

U.S. law is honeycombed with examples of special benefits that organized religions enjoy.

Many conservative religious leaders insist that houses of worship in America today struggle under intense persecution. To hear some of the Catholic bishops tell it, religious freedom may soon be a memory because they don’t always get their way in policy debates.

It would be highly ironic if the United States, the nation that perfected religious liberty and enshrined it in the Constitution’s First Amendment, had become hostile to the rights of religious groups.

But that’s not what’s happening. In reality, U.S. law is honeycombed with examples of preferential treatment and special breaks for religion. Some of these practices may grow out of the First Amendment command that the “free exercise” of religion must not be infringed. Others are traditions or were added to the law after lobbying efforts by religious groups.

Here are five ways American law extends protections and preference to houses of worship.

1. Tax Policy

Tax exemption is given to a variety of religious and secular groups, but in the case of houses of worship, they get one huge advantage: They are tax exempt by mere dint of their existence. They don’t have to apply for tax-exempt status with the Internal Revenue Service, nor, absent highly unusual circumstances or blatant law-breaking, can they lose it.

Contrast this with secular non-profits. If a group of people get together and decide to solicit donations to protect endangered species, they have to apply for tax-exempt status with the IRS, fill out voluminous paperwork and jump through various hoops. If the IRS has problems with the application or determines that endangered species won’t really be protected, tax-exempt status can be denied.

The IRS closely monitors secular non-profits to ensure that they are operating within the law. For example, tax-exempt groups are supposed to serve the public good, not enrich individuals. If non-profit executives receive compensation packages that the IRS determines to be too high, the IRS can act against those groups.

In theory, this could happen to a religious organization as well – except that it never does. Numerous media outlets have exposed the high-flying lifestyles of TV preachers, many of whom own fleets of cars, numerous mansions and even personal jets. Prodded by U.S. Sen. Charles Grassley, R-Iowa, a Senate committee began looking into some of these abuses a few years ago, but in the end, the only thing that emerged was a tepid report that was quickly shelved.

IRS audit procedures also favor churches. Congress actually passed a special law requiring the IRS to institute heightened procedures before auditing a house of worship. The IRS can audit a secular non-profit at the drop of a hat. The procedures for auditing houses of worship are so onerous that few, if any, have ever been audited – even where there’s evidence of financial irregularities.

(By the way, tax exemption for churches is not a constitutional right. The Constitution says nothing about tax exemption for anyone. The practice has long roots in Western culture, but it’s not enshrined in the Constitution.)

2. Criminal Investigations

The sentencing of Catholic cleric Msgr. William J. Lynn of Philadelphia to three to six years imprisonment for knowingly covering up evidence of clerical abuse of children by priests captured national headlines – because it was so unusual.

Lynn is the only church official sentenced to date in a long-running scandal implicating Catholic clergy nationwide. Victims of clerical abuse have had to resort to civil lawsuits to get justice, and even there have encountered numerous roadblocks.

Plenty of evidence indicates that church officials knowingly reassigned offending priests to other parishes instead of alerting law enforcement. In one especially egregious incident, a year-long investigation by the Dallas Morning News in 2004 found that priests accused of child molestation were often given special treatment by law enforcement, and in some cases priests from other countries were allowed to return home.

Observed the newspaper, “Since the clergy sex-abuse scandal exploded anew in 2002, Catholic leaders have taken the brunt of the blame. Overlooked is the role of police, prosecutors and judges – the people expected to hold abusers accountable when the church itself will not. Law enforcement typically has helped through inaction, but sometimes the aid has been direct.”

Efforts by victims to hold top church officials accountable have been stymied by the U.S. government. When victims charged in one lawsuit that Pope Benedict XVI had helped cover up the sexual abuse of children by priests, the Bush administration filed a legal brief asking the court to dismiss the case, arguing in part that the Vatican is a sovereign nation. Similar lawsuits have been filed since then, and the Obama administration has taken the same stand.

3. Political Lobbying

Non-profit groups that want to lobby Congress in Washington, DC, are subjected to strict rules. There are limits on the amount of lobbying these groups can do and the amount of money they can spend on such efforts. The rules for what constitutes lobbying and who qualifies as a lobbyist go on in mind-numbing detail. Non-profits must file detailed quarterly reports. Violations of these regulations can result in fines and even revocation of lobbying privileges.

Religious groups are exempt from all of this. Have you ever wondered how much money the Catholic hierarchy spends lobbying against abortion or marriage equality in DC? Too bad, because the bishops aren’t required to tell anyone.

Laws in the states vary, but most have limited or no regulations that provide oversight of lobbying by religious groups. Many houses of worship resist even minimal disclosure of their spending on political issues. When officials in Montana attempted to require a church to disclose what it had spent supporting a 2004 ballot vote to ban same-sex marriage – arguing that every other group that worked on the issue had to file – the church claimed that giving this information to the public would violate its rights. It filed a lawsuit in federal court and won.

4. Employment Law

People who work for houses of worship and ministries have little protection when it comes to being summarily fired from their jobs. This is to be expected with clergy, but the law seems to be moving to a place where even people in clerical positions and other slots without specific religious duties can be let go at will.

In the secular workforce, laws protect whistle-blowers from retaliation. These laws don’t apply to religious groups in many cases. Women clergy have been fired for reporting sexual harassment in churches. Ministers who are subjected to forms of bias – be it based on race, gender or sexual orientation, have no recourse in the law.

To many legal observers, this makes a certain amount of sense for clergy. The Catholic Church can’t be forced to hire women priests, for example. But some ministries have taken to declaring all of their employees as “ministerial,” a designation that allows them to manage staff with no oversight or protections for employees.

Religious private schools are governed by similar rules. They are free to fire staff for any number of “moral” offenses. Women have been fired for getting pregnant out of wedlock; other teachers have been let go after being outed as gay. This happens even in states where religious schools receive taxpayer support through vouchers, tax credits and other mechanisms.

5. Ceremonial Uses of Religion

Government is supposed to be neutral on matters of theology – in theory. In reality, the government leans on religion pretty frequently, especially for ceremonial purposes. In the process, it creates a symbiotic relationship and a climate of preferential treatment that similarly situated secular groups don’t get.

Members of the clergy are frequently called upon to deliver invocations before government bodies at the local, state and federal levels. Although some jurisdictions make occasional efforts to add a little diversity to the pool by reaching out to non-Christian groups, it’s rare for representatives from secular communities (humanist, atheist, etc.) to be included. In fact, there’s often great hostility to the very suggestion of including them.

Some jurisdictions even hire chaplains at taxpayer expense. Both the U.S. House of Representatives and the Senate have chaplains. They are well compensated with excellent benefits. Some state governments have them, too.


These are just a few examples of the privileges religion enjoys in America. There are many more. Consider marriage ceremonies: Clergy are automatically granted the right to preside at wedding ceremonies and sign licenses on behalf of the government. In some states, it’s very difficult for secular celebrants to win the same right. Zoning laws, which under federal law extend special treatment to houses of worship, are another example.

In other areas, such as access to “faith-based” funding to provide social services, legislators’ default position is that religious groups provide services more effectively and cheaper than secular organizations, even though no objective evidence bears this out. Thus, some religious groups have become very adept at tapping the public purse.

Religious groups enjoy plenty of benefits in America, so why do some religious leaders complain so much about persecution? It boils down to this: When religious leaders cry “persecution,” what they usually mean is that they’re angry that the government won’t act as the enforcer for their theology. Having failed to persuade people to voluntarily adopt their rules, they’d like a little government muscle to make people “moral” or “decent” – as they define those terms.

But that is oppression, not religious liberty. Thankfully, most Americans can still see the difference – even if some religious leaders can’t.

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Rob Boston is director of communications at Americans United for Separation of Church and State. His latest book is "Taking Liberties: Why Religious Freedom Doesn't Give You the Right to Tell Other People What to Do."