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Joe Fragnoli of Fragnoil and Company CPA

Joseph Fragnoli – Managing Partner

The IRS & Federal Court Get One Right.  Atheists’ challenged in court religious related provisions to the Internal Revenue Code and the Federal District Court in Kentucky dismissed their case because they lacked standing in federal court.

Various atheist groups including American Atheists, Inc. filed suit to attempt to stop the Internal Revenue Service from enforcing certain provisions of the Code asserting that they were discriminatorily enforced.   The Atheists challenged Code Sec. 508, churches not being required to file an application for recognition of tax exempt status, and Code Sec. 6033, churches not being required to file annual information returns, amongst other objections.

According to the Atheists, the IRS’s differing treatment of churches violates the Equal Protection laws of the Fifth Amendment, the First Amendment and the Religious Test Clause of Article VI of the Constitution.  A number of atheist organizations have tried to obtain IRS classification as religious organizations or churches under code sec. 501(c)(3) or to obtain otherwise equal treatment and most of those applications and attempts were rejected by the IRS.  The Atheists argued that they suffered from unconstitutional discrimination from the IRS under their inability to satisfy certain tests to gain classification to obtain equal tax treatment under section 501(c)(3).

The District Court held that the Atheists lacked standing to assert their claims and that the Atheists were required to allege personal injury fairly traceable to the IRS’s allegedly unlawful conduct.  In fact, some atheist organizations have in fact received similar status under Code Section 501(c)(3).  Accordingly, the court ruled that being subjected to discrimination and coercion due to inability to gain classification under section 501(c)(3) was mere speculation.  So, in a time with so much negativity regarding the IRS and our judiciary system, in this observer’s opinion, the IRS & Federal Court Get One Right.

If you have any questions regarding the IRS tax code or exempt organization status or any other general tax questions, please feel free to contact us at Fragnoli & Company, CPAs in Brentwood, TN and Chino Hills, CA.  (615) 377-0705.