Resources on Faith, Ethics and Public Life

Branch Ministries v. Rossotti

Branch Ministries v. Rossotti involved the Internal Revenue Service’s (IRS) first revocation of a bona fide church’s tax-exempt status because of its involvement in politics. In general, the IRS provides churches with an exemption from taxation. Donations made by individuals to the church are also deductible to the donor. One requirement for these exemptions, however, is that churches refrain from engaging in political activities. During the 1992 presidential election, Branch Ministries sponsored a series of advertisements in several major newspapers encouraging Christians not to vote for then-governor Bill Clinton. On the basis of these ads, the IRS revoked the church’s tax exemption. Branch Ministries appealed the revocation arguing that the IRS had violated its right to the free exercise of religion guaranteed by the First Amendment and the Religious Freedom Restoration Act. The U.S. Court of Appeals for the District of Columbia concluded that the IRS did not violate Branch Ministries’ First Amendment rights. First, the tax exemption was not conditioned on refraining from conduct mandated by the church’s religious beliefs. While the advertisements reflected the religious convictions of Branch Ministries, withdrawal from involvement in politics did not violate the church’s religious tenets. Second, if the church refrained from involvement in future political campaigns, it could continue to enjoy the benefits of tax-exempt status. Finally, if the church felt that it must be involved in electoral politics, it could incorporate a separate organization under a different chapter of the tax code, and that organization could create a political action committee which could solicit donations to be used for political ads without affecting Branch Ministries’ tax-exempt status.

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