The Freedom From Religion Foundation and its North Carolina chapter, Triangle Freethought Society, sued the Internal Revenue Service (IRS) for giving religious groups preferential treatment.
Under IRS regulations, all 501(c)3 non-profit organizations must file an onerous annual Form-990. An exception is given to churches and other religious organizations. The Form-990 requires detailed reports on revenue and functional expenses, activities, governance, management, how groups fulfill their mission, and what proportion is spent on programs, management and fundraising.
FFRF and Triangle Freethought Society spend thousands of dollars each year to complete the Form-990. Both organizations have to track all their money and show the IRS where it all goes. While churches and other religious organizations do not have to file this form. Meaning that they do not have to track their funds, do not have to publicly report their funds, and also do not have to pay accountants to complete the form.
The complaint explained that “preferential treatment of churches” directly benefits churches, while discriminating against other non-profit organizations, “solely on the basis of religious criteria.”
The District Court initially granted FFRF standing to sue on August 22, 2013. After the Seventh Circuit Court of Appeals decided against FFRF on the Foundation’s parsonage exemption lawsuit, the District Court dismissed this lawsuit as well. The court held that FFRF and the Triangle Freethought Society did not have “standing” to sue. The court reasoned that the IRS had to first officially determine that FFRF was not eligible for the Form-990 exemption before FFRF would have standing to sue.
