# Foundation of Human Understanding v. Commissioner

> United States Tax Court · May 19, 1987 · 88 T.C. 1341

URL: https://www.frixlaw.com/law-library/cases/4485646

## Case

- **Full name:** Foundation of Human Understanding v. Commissioner of Internal Revenue
- **Court:** United States Tax Court
- **Decided:** May 19, 1987
- **Citations:** 88 T.C. 1341; 88 T.C. No. 75; 1987 U.S. Tax Ct. LEXIS 75
- **Precedential status:** Published
- **Opinion:** Dissent by Simpson
- **Judges:** Goffe,Sterrett,Simpson,Nims,Clapp,Parr,Nims,Parker,Whitaker,Korner,Hamblen,Cohen,Clapp,Swift,Jacobs,Wright,Parr,Wells,Gerber,Whitaker,Korner,Cohen,Simpson,Sterrett,Chabot,Parker,Williams,Hamblen,Swift,Jacobs,Wright,Wells
- **Cited by:** 17 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4485646

## How later opinions describe it (automated extraction)

- holding that plaintiff qualified as a church and stating, “Most of the factors considered to be of central importance are satisfied. [Plaintiff] possesses associational aspects that are much more than incidental.”
- finding the decision to grant church status to be a “close question”

## Opinion text

SIMPSON, </., dissenting in part: I agree with the majority’s conclusion that we have jurisdiction in this case, but I must, with due respect, disagree with the conclusion that the petitioner is á church. This Court recently embraced the “spiritual togetherness” definition of a church suggested by Judge Tannenwald in Chapman v. Commissioner, 48 T.C. 358, 367 (1967); in Church of Eternal Life v. Commissioner, 86 T.C. 916, 924 (1986), we defined a church as: -
a coherent group of individuals and families that join together to accomplish the religious purposes of mutually held beliefs! In other words, a church’s principal means of accomplishing its religious purposes must be to assemble regularly a group of individuals related by common worship and faith. * * *
In my opinion, that definition should be applied in this case, and this petitioner does not satisfy that definition. ¡ .
Fortunately, we are not required to decide, what constitutes a religion or a religious organization. The Commissioner concedes that this petitioner is a religious organization. We must decide merely whether this organization is a church, and to decide that issue, we must decide what characteristics distinguish a church from other types -of religious organizations.
Churches receive more favorable tax treatment than any other exempt organizations. Under section ° 170(b)(1)(A), contributions to them are subject to the maximum deduction limitation; to qualify for the maximum deductions, other religious organizations are required to demonstrate that they receive substantial support from the general public. Sec. 170(b)(l)(A)(vi).
Religious organizations that are described in section 501(c)(3) are exempt from the income tax, but they are treated as private foundations unless they come within the exceptions described in section 509(a)(1), (2), (3), or (4). Private foundations are subject to certain excise taxes and stringent reporting and record-keeping requirements. However, a religious organization that is a church is exempted from such taxes and such requirements. In fact, although other religious organizations are required to give the Commissioner notice of their establishment, the Commissioner is prohibited by statute from requiring churches to give notice. Sec. 508(c)(1). In other words, the Commissioner has no authority to require any notices or reports from churches. No other religious organization is granted such freedom from reporting and supervision.
There is no recorded legislative history explaining the reasons for the preferred treatment of churches. It has been suggested that churches are exempted from the reporting requirements in order to avoid the touchy subject of what constitutes a religion. Church of the Visible Intelligence v. United States, 4 Cl. Ct. 55, 64 (1983). However, the exemption from the reporting requirements applies only to churches, not to all religious organizations; therefore, an organization which seeks exemption from tax as a religious organization described in section 501(c)(3) may be required to demonstrate that its activities constitute a religion. Thus, the Commissioner and the courts may be required to pass judgment on whether the activities are religious.
The true explanation for the congressional deference to churches is more likely to be due, at least in part, to a belief that traditional churches do* not require supervision by the Commissioner. A traditional church involves regular and frequent meetings of members of the community, and although a minister or other employees may be engaged to carry on the day-to-day administrative activities of the church, members of the community are generally active participants in the management and carrying on of the activities. The community is fully aware of all the activities of the church and can assure that those activities are carried on for public purposes. Consequently, in the case of a traditional church, there is no need for the Commissioner to require reports and to oversee the activities of the church.
It has been recognized that a church involves an associational activity. In American Guidance Foundation v. United States, 490 F. Supp. 304, 306 (D. D.C. 1980), affd. without opinion (D.C. Cir., July 10, 1982), the court said:
At a minimum, a church includes a body of believers or communicants that assembles regularly in order to worship. Unless the organization is reasonably available to the public in its conduct of worship, its educational instruction, and its promulgation of doctrine, it cannot fulfill this associational role.
The same test was adopted by the Claims Court in Church of the Visible Intelligence v. United States, 4 Cl. Ct. at 65 . This petitioner clearly carries on some associational activity, but is that activity sufficient to justify calling it a church.
In his concurrence in Chapman, Judge Tannenwald suggested that for an organization to be treated as a church, the associational activity had to be “the principal means” of carrying out its purposes, and in Church of Eternal Life, we declared that the associational activity had to be “the principal means” of accomplishing its religious purposes. If a religious organization engages extensively in activities not involving meetings of the community, there is no assurance that the community will participate in those other activities and no assurance that the community will be aware of those activities. Hence, unless the activities not involving the community are only incidental, the reasons for granting the organization full exemption from any reporting requirements do not exist. In my opinion, Congress meant to grant exemption from the reporting requirements only for those organizations that constitute traditional churches serving the community and controlled by the community.
The facts of this case show that this petitioner was not a traditional church. Although it conducted regular meetings for significant numbers of participants, it also sought to spread its beliefs through extensive radio and television activities. Those broadcasts were the principal means of spreading its beliefs; they were not merely broadcasts of services conducted for its members. Under these circumstances, I would hold that this petitioner is not a church for tax purposes.
STERRETT, Chief Judge, agrees with this dissent.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4485646. Public record. Not legal advice.