LOUISVILLE, Ky. (AP) — A federal judge in Kentucky has dismissed a lawsuit brought by an atheist group challenging tax exemptions for churches and religious groups in the federal tax code.
U.S. District Judge William O. Bertelsman ruled Monday that American Atheists Inc. was speculating about being potentially injured by the tax code or treated differently from other organizations.
“At this point, the Atheists have no idea whether they could gain classification as a church or religious organization under (the tax code) because they have never sought such a classification,” Bertelsman wrote.
The New Jersey-based American Atheists, a nonprofit organization, sued the IRS in federal court in northern Kentucky in 2013 saying the tax-exempt status granted to religious organizations is discriminatory and should be ruled unconstitutional.
In order to qualify for nonprofit tax-exempt status, any religious or secular organization must demonstrate it exists to benefit the public. After that basic element is established. Secular nonprofits may face a lengthy application and a fee of as much as $850.
The lawsuit also covered alleged discrepancies in how secular and religious organizations are treated in maintaining their tax-exempt statuses. Secular nonprofits complete Form 990 annually, which details information about finances, donors, volunteers, which is then public information. Religious nonprofits are exempted from filing the Form 990, creating no public record of their finances, donors, volunteers, or personnel.
American Atheist President Dave Silverman said this requirement can put organizations like American Atheists at a fundraising disadvantage compared to religious groups because many people choose not to reveal their atheism for fear of prejudice and discrimination.
Silverman said religious organizations and churches are treated differently from secular organizations. Silverman said the exemptions are applied in a way that discriminates solely on the basis of whether an entity’s members express beliefs and practices accepted as religious.
“The IRS treats your organization better if you profess belief in a supernatural deity,” Silverman said.
Attorneys for the IRS said American Atheists weren’t being hurt by the tax code, so they lacked the legal standing to bring the lawsuit. The IRS also said in court documents that the tax code was unbiased and did not promote one religion over others.
Bertelsman found that the regulations for tax-exempt organizations don’t favor any group over another.
“Here, the statutes and regulations pertaining to tax-exempt organizations do not expressly favor certain religious organizations, nor do they expressly favor theist organizations over atheist or non-theist organizations,” Bertelsman wrote on May 19.
Silverman said the organization will likely appeal.
“We’re going to keep fighting,” Silverman said. “The court has upheld a prejudiced government practice. This isn’t just about atheists; this is about blatant discrimination on behalf of all taxpayers and all Americans. Make no mistake. This is not over.”
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