The LDS Church and Section 501(c)(3)

A number of web sites opposed to the passage of Proposition 8 in California, such as http://www.mormonsstoleourrights.com/, are claiming that the Church of Jesus Christ of Latter-day Saints has violated its tax-exempt status by supporting the proposition. They quote a provision of the Internal Revenue Code section 510(c)(3) (26 U.S.C. § 501(c)), which says the following organizations qualify as exempt (emphasis added):

Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.

The critics of the Church claim that the Church's involvement in the Prop. 8 issue is a substantial activity, and as such, the Church should not qualify for tax exemption. Unfortunately, these critics are misreading the Code. What it says is that "no substantial part" of the organization's activities can be involved in influencing legislation. There is a huge difference between what the Code says and what the critics want it to say. Anyone familiar with the Church's activities throughout the world should recognize that the involvement of the Church in the Prop. 8 issue is minuscule compared with even its non-ecclesiastic projects, such as humanitarian work and education.