Jump to content

Religious Tax Exemption


Mighty AC

Recommended Posts

First off do churches even deserve tax exemptions and why do we grant them? Is it because they do something positive for the community? I know some do for sure, but do they all? How do we know which groups are doing ‘enough good’? They don’t have to open their books.

Secondly, who decides what is a church and what is just a group of enthusiasts? Seems like a fine, arbitrary line to me. In my opinion, if Mormonism passes the test then the gate is really wide open for anyone.

Let’s say I believe the universe is really a fishbowl on the night stand of a giant. If I round up enough children and teach them the giants require our devotion or they will flush the contents of the bowl and we will be doomed to a massive sewer system full of alligators and rats for eternity, in a couple of decades we’d have a solid following. Who at the CRA has to decide if that qualifies?

Finally, these deductions aren't chump change. I've read estimates that the tax savings amounts to at least 48 bazillion dollars. Sure, a bazillion may not be a real number but the actual total is certainly large.

So to fix this problem I think churches should not receive tax exemptions. Instead, they should apply for charitable status. They will then have to abide by the same rules as charities. They will have to open their books and refrain from ‘political activism’. Those that want to be politically active or hide their finances can simply pay taxes. To me this approach seems fair, open and free from bias. Thoughts?

Link to comment
Share on other sites

  • Replies 97
  • Created
  • Last Reply

Top Posters In This Topic

I'm sure there has to be some safeguards in place to ensure that a church does legitimate good to obtain charitable status or, like you say, anyone could say they're a church.

"I'm the church of me, there for I don't have to pay taxes!!!" You don't see that happening do you?

MADD gets charitable status yet, the amount of money they send to an actual cause vs. how much goes to "admin" doesn't change their ability to get tax exemptions on charitable grounds.

Some charities are politically active. Why should a church lose charitable status if they try to lobby governments but a secular charity doesn't? In Toronto last week a city councillor was charged with DWI and MADD came down strongly against other councillors that showed support for them.

A legit church likely does lots of charitable work therefore it should be seen by the government as a charitable organization. Even if they don't funnel a good majority of their money to a charitable cause doesn't mean they should have to pay taxes on the donations they receive from an offering. People give that money freely as a charitable donation and can write it off.

I think people's hatred for religious organizations think that churches are somehow undeserving of having charitable status.

Edited by Boges
Link to comment
Share on other sites

Well a Church has staff. I'm sure they have to issue them T4's every year. If you think a certain pastor makes too much money then don't donate to that church. Doesn't mean all church's do that.

Just like all charities don't funnel most of their money to administration and very little to the actual cause. But a lot do, do that.

Link to comment
Share on other sites

I think people's hatred for religious organizations think that churches are somehow undeserving of having charitable status.

Churches don't have "charitable status" right now. So I'm saying the opposite. Churches should have to become charities and follow the rules of charities to receive a tax exemption.

Link to comment
Share on other sites

Churches don't have "charitable status" right now. So I'm saying the opposite. Churches should have to become charities and follow the rules of charities to receive a tax exemption.

But they receive their income in the form of charitable donations, They don't charge people to come to church. If they did, I'm sure that money would be taxable.

If you've ever been to a church they like you to give your regular donations in a labeled envelope so at the end of the fiscal year they can issue you a tax receipt.

Why should money given as a charitable donation be taxed? That's sort of like taxing the food bank for the food they receive.

Edited by Boges
Link to comment
Share on other sites

There is already too much confusion of this, so, for Canadians, here is a primer:

1) We have charitable organizations and we have non-profit organizations. A NPO can be a charity or not. Usually a charity and a NPO are organized under a society act. IOW, this is like being incorporated with the exception that a charity/NPO do not provide benefits to shareholders (not surprising since the Society is not owned for the benefit of shareholders but for certain other purposes).

2) A NPO does not give out tax receipts for any "donations" since it is not a charity.

3) If the society is a charity then it may issue donation receipts for donations.

4) A charity files a charity return and anyone can go online to review these if they like.

5) A NPO files a T2 (Corporate tax return) under section 149 which exempts it from tax.

Since we are talking primarily about charities I am going to move on and ignore further reference to NPO's:

6) To form a charity you need to consider these guidelines:

To be charitable at law, an organization must have purposes that fall under one or more of the four heads (categories) of charity:
  • the relief of poverty;
  • the advancement of education;
  • the advancement of religion; and
  • certain other purposes that benefit the community in a way the courts have said is charitable.

The last category is limited to purposes that have been determined by the courts to be charitable at law.

So, merely advancing religion is, in and of itself, considered a charitable purpose. [For which I personally disagree]

7) The tax benefits from this are as follows:

a) If revenues exceed expenditures for the year (i.e. a net income) then no income taxes are paid.

B) Donations received lead to the issuance of tax receipts so that the donor receives a tax break equal to ~ 20% on the first $200 and ~ 39% to 48% on anything over $200 (depending on what province you live in).

c) Property tax exemptions are usually provided to charities and it is rare for any church to pay any property tax.

8) Other tax benefits include special deductions provided for the clergy related to church provided housing called the clergy residence deduction. That's right - if I provided a residence to one of my employees the benefit would be taxable. If you're a church with a priest then the priest doesn't have to pay tax on this benefit because he is a priest/pastor! Isn't life grand....

9) Yes, a church does issue T4 slips to employees (including the priest/pastor) and the employees would pay taxes just like any other working stiff (with the exception of #8 above).

10) Charities are not supposed to partake in politics. This has been an issue from time to time and, right now, is becoming an increasing frustration for Humanists/Atheists in the US (where similar rules apply vis-a-vis no political activities).

That's all I can come up with during my lunch time but I may be back later for further clarification.

Edited by msj
Link to comment
Share on other sites

MSJ - thank you so much for your clear conveyance of information.

I don't see churches getting that much of an advantage over other charities, except for the fact that the priest doesn't have to claim living in residence as a benefit.

There isn't much point in changing the status of churches - nor is there any political reason to.

Link to comment
Share on other sites

MSJ - thank you so much for your clear conveyance of information.

I don't see churches getting that much of an advantage over other charities, except for the fact that the priest doesn't have to claim living in residence as a benefit.

There isn't much point in changing the status of churches - nor is there any political reason to.

Except if you hate Religion. That being said, I'll be consistent here. If someone starts up the Church of the Flying Spaghetti Monster and can convince people to donate to them, those donations should be tax exempt.

Link to comment
Share on other sites

I did a quick search but can't find any difference between faith-based non-profit organizations and other non-profit organizations.

Its true that in canada churches have the same tax status as other charitable organizations, and I dont have any problem with churches having an exemption on charitable activity. But thats only a small part of what they do. And the problem is that the church collects all these tax deductible donations, but only gives a small percentage of them to charity, and some of them horde an obcene ammount of wealth. The roman catholic church for example is the worlds largest owner of realestate.

Link to comment
Share on other sites

MSJ - thank you so much for your clear conveyance of information.

I don't see churches getting that much of an advantage over other charities, except for the fact that the priest doesn't have to claim living in residence as a benefit.

There isn't much point in changing the status of churches - nor is there any political reason to.

Well, if I give $1,000 to a charity I will save around $380 in income tax.

If I give $1,000 to a NPO I will get nothing back.

So that difference is significant - this is why people donate to charities rather than NPO's.

As to comparing a charity with another charity, however, no, they are essentially the same except for the clergy residence deduction which, to me, is a BS deduction.

I also disagree with calling advancement of religion as being charitable.

Helping the poor, disadvantaged, improving the environment etc... are clear acts of charity.

I audit several charities - mental health providers, low income seniors housing, addiction treatment centre, environmental groups (who provide real benefits by investing in fish streams etc) and have no problem with people donating to them getting a tax break.

But preaching to the choir? Heck, having the choir sing to the choir? Really? That's charity?

Link to comment
Share on other sites

Its true that in canada churches have the same tax status as other charitable organizations, and I dont have any problem with churches having an exemption on charitable activity. But thats only a small part of what they do. And the problem is that the church collects all these tax deductible donations, but only gives a small percentage of them to charity, and some of them horde an obcene ammount of wealth. The roman catholic church for example is the worlds largest owner of realestate.

The term 'charity' is so loose as to be meaningless. If I think my activity benefits the community and I don't take a profit, I can set up a charity basically.

You can't set them below the law. Lots of non-profits and charities have assets and property.

Link to comment
Share on other sites

As to comparing a charity with another charity, however, no, they are essentially the same except for the clergy residence deduction which, to me, is a BS deduction.

I also disagree with calling advancement of religion as being charitable.

Right. There really isn't much to go on here. Churches provide more benefit to society than many so-called charities.

Helping the poor, disadvantaged, improving the environment etc... are clear acts of charity.

Churches do this too.

But preaching to the choir? Heck, having the choir sing to the choir? Really? That's charity?

Visiting the sick - providing comfort to old people - bringing food to poor people at Christmas...

Yes, churches are charities.

Link to comment
Share on other sites

Right. There really isn't much to go on here. Churches provide more benefit to society than many so-called charities.

In some cases yes and in other cases no.

I have prepared financial statements for churches (not audited - reviewed) and some Churches provide little more than a place to preach.

The charities that I do audit provide lots of services that benefit society - mental health services and housing, low income seniors housing, rebuilding streams so that fish actually are using the stream again etc...

I have no problem with those services.

Visiting the sick - providing comfort to old people - bringing food to poor people at Christmas...

Yes, churches are charities.

Sure, and the extent that they do these things then that part is charitable.

The preaching part, however, is not, imo.

If people think that they are giving money to a church and it's only going for these programs then they are sadly mistaken.

Link to comment
Share on other sites

Right. There really isn't much to go on here. Churches provide more benefit to society than many so-called charities.

Depends on the church and depends on the charity.

Some charaties have very high overheads, others manage to divert a much bigger portion of their donations to their intended recipients. Unicef and the Red Cross (2 of the bigger charities) manage to spend >90% of their revenue on their indended programs (only 10% overhead).

And while your local church may have a "missions" fund to help overseas, or run a soup kitchens, I suspect most of the money collected by the church ends up being used for things like simply maintaing the church infrastructure, pastor's salaries, etc. (Your local priest may spend time helping the poor, but its only a fraction of his job.)

Edited to add:

I should also mention that while you're talking about "churches helping people", the definition of a "church" also includes such sleazy individuals as Benny Hinn.

Visiting the sick - providing comfort to old people - bringing food to poor people at Christmas...

And heating and maintaining a large building that's used primarly for people to come in and pray. Which might make the parisioners feel good, but it isn't exactly 'charity' in that it helps the community at large.

Edited by segnosaur
Link to comment
Share on other sites

Depends on the church and depends on the charity.

Some charaties have very high overheads, others manage to divert a much bigger portion of their donations to their intended recipients. Unicef and the Red Cross (2 of the bigger charities) manage to spend >90% of their revenue on their indended programs (only 10% overhead).

And some charities don't give anything to recipients.

And while your local church may have a "missions" fund to help overseas, or run a soup kitchens, I suspect most of the money collected by the church ends up being used for things like simply maintaing the church infrastructure, pastor's salaries, etc. (Your local priest may spend time helping the poor, but its only a fraction of his job.)

Maybe, maybe not.

I should also mention that while you're talking about "churches helping people", the definition of a "church" also includes such sleazy individuals as Benny Hinn.

And heating and maintaining a large building that's used primarly for people to come in and pray. Which might make the parisioners feel good, but it isn't exactly 'charity' in that it helps the community at large.

Helping the parishioners feel good means helping people, means helping the community.

And yes there are crooks who masquerade as religious people, as well as crooks who masquerade as cancer victims etc. etc. Neither here nor there.

Link to comment
Share on other sites

Well there is no way to quantify what charities are good and bad and certainly no way to determine where churches lie on the moral scale.

Actually, there is a web site called 'charity navigator' that will be of at least some assistance in that regard.

It looks at a charitie's income and overhead, its transparency, etc.

See: http://www.charitynavigator.org/

Its not a perfect measure (since there's no way to quantitativly compar the goals of various charities) but its a start.

Compare that to a church, where even if they do charitable work, its almost impossible to determine how much of their resources is used to help others, and how much is used for internal purposes.

Link to comment
Share on other sites

Some charaties have very high overheads, others manage to divert a much bigger portion of their donations to their intended recipients. Unicef and the Red Cross (2 of the bigger charities) manage to spend >90% of their revenue on their indended programs (only 10% overhead).

And some charities don't give anything to recipients.

Thing is, we can measure that... registered charaties typically have their books scrutinized so you have an idea of how much money goes to overhead, and how much actually gets used for its indented purposes.

Compare that to a church... if a priest administers to his parishioners and they run a soup kitchen, how much of his time do you consider being "charitable"? Do you measure by the hour? What if they preach at the same time as working at the soup kitchen? And if the soup kitchen is in the church, how much of the church maintenance is considered "charity"? Do you go by square footage?

The problem is, trying to determine how much of what a church does is 'charity' is pretty much impossible.

Helping the parishioners feel good means helping people, means helping the community.

When I talk about "helping the parishioners" I'm talking about the people who both go to church and are the donors.

If someone gives to the church, and instead of running soup kitchens, giving to the poor, etc. they just use all the money to pay for the basic church services, then its not really charity in any way. In that situation, the parishioner is doing nothing different than someone who goes to see Tony Robbins speak. Yes, you might "feel good" but its ultimately a selfish act.

Link to comment
Share on other sites

Especially hard to determine that because I would consider saying mass to be helping others and other people apparently don`t.

Saying "mass" is helping peolple in the same way that Tony Robbins helps people...might make them feel good, but that's about it.

And since the people who receive mass are often the people making the donations, then its more selfish than charitiable.

Maybe we should install some of these:

http://www.guardian.co.uk/education/2012/jul/26/praying-booth-at-manchester-university

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Unfortunately, your content contains terms that we do not allow. Please edit your content to remove the highlighted words below.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...